Fed Lowers Rates

The Federal Reserve’s Federal Open Market Committee lowered the federal funds rate by 25 basis points to 2 percent. The Fed hopes to spur spending, citing weak economic activity and “subdued” spending by households and businesses and soft labor markets. Acknowledging the threat of inflation, the Fed’s announcement included a note of hope. According to a statement, “The committee expects inflation to moderate in coming quarters, reflecting a projected leveling out of energy and other commodity prices and an easing of pressures on resource utilization. Still, uncertainty about the inflation outlook remains high. It will be necessary to continue to monitor inflation developments carefully.”