STREAMING NOW: Watch Now

The Fed cut rates for the first time since 2008

Federal Reserve Chairman Jerome Powell announced the central bank will lower interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn.

Posted: Jul 31, 2019 3:11 PM


The Federal Reserve on Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn.

Policymakers led by Fed Chairman Jerome Powell voted 8-2 in favor of a small cut in the federal funds rate, and recommitted to their promise to "act as appropriate" to sustain the country's longest economic expansion in history.

Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%.

The rate cut follows months of pressure from President Donald Trump, who has broken with his predecessors' practice of walling off the central bank from politics.

The central bank is hoping a rate cut will be the necessary injection to keep the US economy healthy, especially because it has limited ammunition to respond to a downturn with historically low interest rates.

The Fed also announced plans to end the reduction of its $3.8 trillion asset portfolio, effective August 1, two months earlier than previously expected. The runoff was set to end after September.

Not all, however, were in agreement with the Fed's decision to ease policy.

Both Boston Fed President Eric Rosengren and Kansas City Fed President Ester George dissented on the move, signaling policymakers extensively debated whether this month's meeting was the right time to cut rates amid signs of a healthy economy.

The Fed's rate cut and plans to end quantitative tightening follows months of pressure from President Donald Trump, who has repeatedly rebuked his pick to lead the central bank for not doing enough to boost the US economy. On Monday, Trump criticized the Fed in a series of tweets for making "all the wrong moves," adding "a small rate cut is not enough."

Policy makers in their statement said they would "continue to monitor" incoming data and would act as needed to support the economy. Investors interpreted that as a signal that the central bank may be prepared to cut further, if needed, should uncertainties persist. Stocks were little changed immediately following the Fed's announcement, because the market had already priced in a quarter-point rate cut.

Since the start of the year, the Fed has pursued a more agile approach in setting policy to contend with greater uncertainty. Trade uncertainty has dominated concerns by policymakers, who have repeatedly noted the impact such longstanding disputes between the United States and China have had on global growth and investment.

Powell, and others, have argued central banks should get ahead of a downturn after seeing any signs of weakness to get more bang for their buck in such a low-interest rate environment.

Still, the Fed will need to justify the decision to plow ahead with a rate cut given some prevailing strength in the economy. Since their last meeting in June, the job gains, retail sales and economic growth have been stronger than expected.

Investors will also be looking for more clues about potential cuts in the future when Powell briefs reporters at his now-regular press conference.

West Lafayette
Clear
71° wxIcon
Hi: 94° Lo: 71°
Feels Like: 71°
Kokomo
Clear
70° wxIcon
Hi: 92° Lo: 70°
Feels Like: 70°
Rensselaer
Clear
66° wxIcon
Hi: 92° Lo: 69°
Feels Like: 66°
Fowler
Clear
66° wxIcon
Hi: 92° Lo: 69°
Feels Like: 66°
Williamsport
Clear
71° wxIcon
Hi: 92° Lo: 70°
Feels Like: 71°
Crawfordsville
Clear
67° wxIcon
Hi: 91° Lo: 71°
Feels Like: 67°
Frankfort
Overcast
72° wxIcon
Hi: 92° Lo: 71°
Feels Like: 72°
Delphi
Clear
72° wxIcon
Hi: 93° Lo: 70°
Feels Like: 72°
Monticello
Clear
72° wxIcon
Hi: 93° Lo: 69°
Feels Like: 72°
Logansport
Clear
70° wxIcon
Hi: 93° Lo: 69°
Feels Like: 70°
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 47432

Reported Deaths: 2687
CountyConfirmedDeaths
Marion11546683
Lake5104242
Elkhart321144
Allen2737129
St. Joseph190866
Cass16389
Hamilton1538100
Hendricks1390100
Johnson1256118
Porter72037
Tippecanoe6948
Madison65564
Clark64044
Bartholomew58244
Howard56557
LaPorte56326
Kosciusko5354
Vanderburgh5026
Marshall4823
Jackson4693
Noble46928
LaGrange4677
Hancock44035
Boone43743
Delaware43150
Shelby42325
Floyd37144
Morgan32731
Montgomery29320
Grant29126
Clinton2882
Monroe27628
Dubois2666
White26010
Henry25815
Decatur24932
Lawrence24225
Vigo2318
Dearborn22823
Harrison21222
Warrick21229
Greene18532
Miami1822
Jennings17411
Putnam1688
DeKalb1604
Scott1607
Daviess14216
Orange13623
Wayne1366
Steuben1282
Perry1279
Franklin1248
Ripley1157
Jasper1142
Wabash1122
Carroll1102
Fayette987
Newton9810
Starke923
Whitley905
Randolph784
Huntington742
Jefferson722
Wells711
Fulton691
Jay680
Washington681
Gibson672
Knox640
Pulaski641
Clay604
Rush563
Adams501
Benton480
Owen471
Sullivan441
Brown381
Posey380
Blackford372
Spencer371
Crawford300
Fountain302
Tipton301
Switzerland260
Martin220
Parke220
Ohio140
Vermillion140
Warren141
Union130
Pike100
Unassigned0193

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events