The Federal Reserve announced Wednesday afternoon the first cut to its interest rate benchmark since President Donald Trump’s inauguration. The benchmark was lowered by 25 basis points. In a rare show of dissent, however, newly appointed board member Stephen Miran pushed for a 50 point cut.
Trump has aggressively pushed the Fed to cut rates, including sharply criticizing the chairman of the Federal Reserve, Jerome Powell.
In a press conference following the announcement, Powell cited a slower-than-expected job market and inflation risk as the principal causes for the cut. “The concern is that if you start to see layoffs, there won’t be a lot of hiring going on,” he said.
The reduced interest rate will make borrowing more affordable and is intended to stimulate investment, ideally increasing the number and quality of available jobs.
Markets reacted positively to the news, with the DJA, S&P 500 and NASDAQ all hitting record highs after the announcement.
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