The US Federal Reserve has lowered the target for its key lending rate by 0.25 percentage points, putting it in a range of 3.75 percent to 4 percent. The central bank pushed forward with an interest rate cut as inflation fears continue to take a backseat to concerns about a stalling labour market. The Fed’s latest cut brings the target for its key lending rate down to its lowest level in three years, easing borrowing costs across the US.
It came despite the US government shutdown, nearing its one-month mark, which delayed official data and left central bankers flying blind about the job market, economists said. The Fed last month had cut interest rates for the first time since last December. Economists expected the move to jump-start further reductions, but the data drought means the trajectory for future cuts looks murky. Two voting members on the Fed’s committee opposed the central bank’s decision. At a press conference following the cut, Fed chair Jerome Powell called the labour market “less dynamic and somewhat softer” than earlier this year, pointing in part to lower immigration.
