The Fed Announced A 25 Basis Point Cut In Interest Rates For The First Time In Ten Years.

Beijing time on August 1st, at 2 a.m. today, the Federal Reserve Open Market Committee (FOMC) meeting decided to cut interest rates by 25 basis points, and the federal funds interest rate target interval was reduced to 2% to 2.25%, which was in line with market expectations.

The following is the full text of the Federal Open Market Committee policy statement released by the Federal Reserve on Wednesday in Washington:

Information received since the Federal Open Market Committee meeting in June showed that the labour market remained strong and economic activity grew at a moderate pace. Average employment growth has been steady in recent months, and the unemployment rate is still low. Although household expenditure growth appears to have picked up earlier this year, corporate fixed investment indicators have been weak. Based on 12 month based indicators, the overall inflation rate and food and energy inflation rate are below 2%. The market based inflation compensation index is still low; the longer term inflation expectations based on the survey have hardly changed.

In order to fulfil its statutory duties, the Committee seeks to promote full employment and price stability. To support these goals, the committee decided to reduce the target range of the federal funds rate to 2%-2.25%. This action supports the committee's view that the sustained expansion of economic activity, the strong labour market situation, and inflation are close to the symmetry of the Commission. The 2% objective is the most likely outcome, but the uncertainty of this prospect still exists. When the committee considers the future path of the target range of the federal funds rate, the committee will continue to focus on the impact of the latest information on the economic outlook and take appropriate measures to maintain the expansion of the economy in view of the strong labor market and the inflation rate approaching its 2% target of symmetry.

In determining the timing and scope of future adjustment of the federal funds rate target interval, the Commission will assess the comparison between the realized and expected economic situation and its full employment objective and the symmetry of the 2% inflation target. This assessment will take into account a wide range of information, including indicators for measuring labour market conditions, indicators of inflation pressure and inflation expectations, and data on financial and international dynamics.

The committee will end its operation of reducing total securities holdings in the open market account in August, two months ahead of the previously indicated schedule.

The members who voted for the Federal Open Market Committee's monetary policy actions were: Chairman Jerome Powell, vice chairman John C.Williams, Michelle W.Bowman, Lael Brainard, James Bullard, Richard H.Clarida, Charles L.Evans and Mr. Yu; those who voted against the action were "Gang" and "Gang". Opponents at this meeting tended to maintain the target range of the federal funds interest rate unchanged.