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The Fed slashes interest rates for 3rd time since financial crisis

The Fed slashes interest rates for 3rd time since financial crisis

FILE - In this June 19, 2019, file photo the Washington news conference of Federal Reserve Chair Jerome Powell appears on television screen on the trading floor of the New York Stock Exchange shows the rate decision of the Federal Reserve. The Fed concludes its two-day meeting Wednesday, Oct. 30. (AP Photo/Richard Drew, File)Associated Press

The Federal Reserve lowered borrowing costs Wednesday for the third time since the financial crisis as policymakers sought to insulate the longest expansion on record from growing risks.

Following a two-day policy meeting, the central bank cut its benchmark interest rate to a target range of between 1.5% and 1.75%. The quarter percentage point cut had been widely anticipated by forecasters and investors but fell short of White House demands for aggressive stimulus measures.

In recent months, the policy-setting Federal Open Market Committee has become divided over how to approach strains that have emerged against the backdrop of a still solid economy. Consumer activity and hiring appear to be holding up stronger than expected, even as the Trump administration's trade disputes and a broader manufacturing slowdown weigh on activity.

Several policymakers had disagreed with the decision to cut interest rates in September. St. Louis Fed President James Bullard voted for a larger cut, while Kansas City Fed President Esther George and Boston Fed President Eric Rosengren voted to keep rates unchanged.

"We think any attempt by Chair Powell today to persuade his colleagues to signal an intention to keep cutting rates would be met with real resistance, and we doubt that Mr. Powell feels the need to pick that fight at this point," said Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

The Commerce Department estimated earlier on Friday that the economy expanded at a rate of 1.9% in the third quarter, a figure that topped expectations but was still the second-slowest pace of the Trump presidency. The October jobs report, set to be released Friday, could shed light on the rate outlook.

This story is developing. Please check back for updates.

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