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Rexburg
March 3, 2021
Economy

US Federal Reserve cuts rates for second time since July

The U.S. Federal Reserve cut interest rates by a quarter of a percentage point for the second time since July on Wednesday.

The Fed cut its key lending rate to a range of 1.75% to 2.00% after a vote of 7-3.

The central bank cited global developments and “muted inflation pressures” in deciding to lower the benchmark overnight lending rate.

Central banks often cut interest rates when the economy enters into a recession, but they also sometimes cut rates when growth is slowing.

Donald Trump called the Chairman of the federal reserve a “terrible communicator” after the Fed announced the cuts saying the Fed had “no ‘guts’, no sense, no vision”.

The dollar gained ground against the euro and yen, Reuters reported.

“Another rate cut from the Fed to try to shield the U.S. economy from global headwinds,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington told Reuters.

“Today’s move was more of a hawkish easing in that the Fed’s median forecasts for rates suggested no more cuts this year, while some officials dissented.”

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