Fed lowers target rate by 25bps

The Federal Open Market Committee has decided to lower the target federal funds rate by 25 basis points to a range of 2.0–2.25 percent following its meeting July 30–31. This was the first cut in rates since the global financial crisis.

“While the FOMC vote was not unanimous, the Fed by its words and actions showed it will act to sustain the expansion,” noted Spencer Levy, chairman of Americas research at CBRE, and a senior economic adviser for CBRE, in a reaction to the news on Twitter.

A key explanation for shifting the rate downward is “the implications of global developments for the economic outlook as well as muted inflation pressures,” according to a statement from the committee. Such global developments include the economic effects of tariffs and trade wars.