The US Federal Reserve for the first time in 10 years lowered the rate: what does it mean

For the first time in a decade, the US Federal Reserve reduced the rate, fully meeting the expectations of analysts and the market. From the American regulator are waiting for further easing.

Фото: Depositphotos

The US Federal Reserve (FRS), which serves as the country's central bank, for the first time since the global financial crisis has lowered its base interest rate, writes RBC. It went down on 25 base points - from 2,25 – 2,5 to 2 – 2,25%, follows from the materials of the department, published after the meeting of its leaders.

Analysts on the eve of the meeting were virtually confident of a decline in 25 b. P .: 72 from 84 economists surveyed by Bloomberg waited for just such a decline, 11 - that the rate will remain unchanged. One predicted a decline immediately on 50 b. P.

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For more than ten years, the Fed has either raised or kept the rate. In 2007 – 2008, the Fed aggressively reduced the rate from 5,25% to almost zero (0 – 0,25% in December 2008 of the year) to support the US economy hit by the crisis. In September, the regulator began a quantitative easing program to reduce long-term interest rates and stimulate economic growth in September: every month bought Treasury and mortgage bonds worth $ 2012 billion.

In December, the Fed began to cut purchases on a monthly basis until the end of the program in the fall of 2013. And in 2014, against the background of economic recovery, the Fed began a gradual rate hike. Last time he raised her in December, 2018, and this was accompanied by criticism from US President Donald Trump and calls by the White House to pause in tightening policy due to near-zero inflation.

"Moderate" easing

Former Fed Chairman Janet Yellen on the eve of the meeting said that she supported a rate cut on 25 b. The USA is a part of the world economy, she stressed, and it is necessary to take into account the situation in other regions, particularly in Europe and Asia.

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Donald Trump on Monday, July 29, on the contrary, criticized this option on his Twitter: according to him, a small reduction in rates is not enough for the American economy. Morgan Stanley economists have been waiting for a decline right away on 50 b. P. - from their point of view, it was necessary to prevent the risks of a more dramatic slowdown in economic growth. Markets may not have enough “moderate easing” of US monetary policy, and “monetary shock” is needed to continue growth.

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