Insights

Today’s FOMC Decision: Everything You Need to Know

Oct 30, 2019

Neil Waud

The Federal Open Market Committee (FOMC) voted today, October 30, 2019, to lower interest rates again by 25 basis points.

What Has Happened This Year:

After raising the Federal Funds target rate four times in 2018, mounting concerns regarding the health of the global economy have prompted the Federal Reserve to cut interest rates this year. By loosening monetary policy, the Federal Reserve seeks to preserve the current U.S. economic expansion which is now the longest in recorded history at 124 months.

What Happened Today:

For the third time this year, the FOMC voted to cut the Fed Funds target rate by 25 basis points to a new range of 1.50% to 1.75%. With downside risks to the U.S. economy continuing to build, this essentially is another insurance cut” to aide the long-term health of the U.S. economy.

Why This Happened:

Despite the current optimism for a “phase one” trade deal between the U.S. and China, economic data has softened since the last FOMC meeting. As we alluded to in September, the lack of concrete details surrounding the trade pact has likely tipped the FOMC to act on the side of caution, providing yet another rate cut and boost to the economy. The current health of the U.S. economy is highly dependent on consumer spending, with the future performance of the sector heavily influencing the outcome of the next FOMC meeting on December 11, 2019.

Why Public Trust:

Public Trust closely monitors the market in an effort to continually keep you up-to-date on investment-related matters. We strive to keep you informed so that you are able to best manage your investments while knowing your funds are safe. If you have any questions or simply want to speak with one of our experienced professionals about this investment update, please do not hesitate to reach out.

Past performance does not guarantee future results. Any financial and/or investment decision can incur losses. Yields can vary over time. This communication is for informational purposes only. All information is assumed to be correct but the accuracy has not been confirmed and therefore is not guaranteed to be correct. Information is obtained from third-party sources that may or may not be verified. All comments and discussion presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. There is a strong correlation between the Fed Funds rates and local government investment yields.

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