Fed cuts interest rates for second time this year amid labor market weakness

Fed's second interest rate cut comes despite inflation remaining above the central bank's 2% target

Eric Revell / FOXBusiness 

 

The Fed policymakers voted to lower the benchmark federal funds rate by 25 basis points to a new range of 3.75% to 4%. The move follows a rate cut of that size in September, which was the first reduction this year.

Policymakers have been monitoring economic data, which has shown a slowdown in the labor market in recent months as businesses grapple with changes in trade and immigration. Meanwhile, inflation has trended higher as tariff-related price hikes filter into government data.

Those trends have put the Fed in a bind as it looks to fulfill its dual mandate goals of stable prices in line with the 2% long-run target for inflation as well as promoting maximum employment.

The Federal Open Market Committee (FOMC), which guides the central bank's monetary policy moves, noted in its announcement that there...Read more and see video here.