Fed Cuts Interest Rates for First Time Since 2008 Crisis

Officials did not indicate in their statement whether this cut would be followed by additional moves. The Fed’s June economic projections suggest policymakers envision cutting rates slightly to shore up the economy, rather than beginning an easing cycle that will return rates to zero.

“As the committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion,” the Fed said in its statement, seemingly leaving its options open.

Mr. Powell said the committee viewed the move as a “mid-cycle adjustment to policy,” suggesting that the Fed sees this cut as more similar to two instances in the 1990s, during which the Fed moved rates down slightly to get the economy through periods of uncertainty, rather than the beginning of a rate-cutting campaign.

The Fed chair did not rule out a future cut, saying the committee would continue to monitor the economy and act to sustain the expansion, but said the Fed believed this cut would help support the economy. “We will see whether growth is picking up, whether it’s bottoming out,” he said.

The widely expected move was largely greeted with a shrug in financial markets, where investors have been factoring in a quarter-point rate cut for weeks. The S&P 500, which had been roughly flat before the 2 p.m. decision, briefly slumped, but then clawed back those losses. Shortly before 2:15 p.m., the benchmark index was basically unchanged. Likewise, yields on Treasury bonds were largely unchanged a few minutes after the announcement, with the 10-year Treasury note yielding 2.02 percent.

The Fed’s rate cut carries political risks, given Mr. Trump’s attacks on the central bank. Mr. Trump has been denouncing the Fed in speeches and on Twitter for the past year, criticizing its four 2018 rate increases and blaming its policies for slowing the American economy. Some onlookers may see Wednesday’s move as caving to the president.

The Fed operates independently of the White House. It attributed the change, which officials have been signaling for months and which investors fully expected, to growing economic concerns.

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