Washington, Oct 29 (EFE).- The U.S. Federal Reserve announced Wednesday that it is cutting interest rates by a quarter point to a range between 4% and 3.75% due to the increase in 'downside risks to employment in recent months.' In a statement released by the Fed's Federal Open Market Committee (FOMC) at the conclusion of its two-day monetary policy meeting, the body stated that 'uncertainty about the economic outlook remains high.' The Fed, which already made a similar rate cut at its September meeting, also announced it will end the reduction of its balance sheet, a process known as quantitative tightening, this coming December 1, further intensifying monetary easing. The FOMC indicated it remains attentive to the risks affecting both sides of its dual mandate—full employment and inflation of around 2%—and considers that 'downside risks to employment have increased in recent months.' This is linked to the cooling of the U.S. job market due to the federal government shutdown, in which the world's largest economy has been mired since October 1. As was the case at the September meeting, Stephen Miran, a newly appointed Fed governor by Trump with the goal of promoting greater monetary easing, once again voted against the decision approved by 10 of the 12 FOMC voting members, stating he preferred a half-point rate cut. The other dissenting vote came from the president of the Federal Reserve Bank of St. Louis, Jeffrey Schmid, who indicated he preferred to keep the price of money frozen for now. Many economists, as well as the majority of FOMC members, according to the Fed's latest Summary of Projections, believe the appropriate level for the price of money by the end of the year would be a range between 3.5% and 3.75%, so many anticipate that at its last meeting of the year in December, the entity will cut another quarter point. However, the persistent federal government shutdown and the consequent lack of indicators to assess the health of the world's largest economy cast doubt on another possible cut in December. Photo EFE. The rate cut is in line with what was predicted by the majority of analysts, who expected a 0.25% cut in the benchmark rate even amid the current lack of macroeconomic data published in the U.S.
