US Federal Reserve cuts interest rates and highlights data limits during shutdown.
US interest rates were cut by 0,25 percentage points, to a range of 3,75% to 4,00%.
WASHINGTON (Reuters) - The Federal Reserve cut its benchmark interest rate by 0,25 percentage points to a range of 3,75% to 4,00% on Wednesday (29) and announced it would restart limited purchases of Treasuries after money markets showed signs that liquidity was becoming scarce, a condition the US central bank pledged to avoid.
The cut, which included a nod to the data constraints the central bank faces during the current federal government shutdown, drew dissent from two monetary policymakers, with Governor Stephen Miran again calling for a deeper reduction in borrowing costs and Kansas City Fed President Jeffrey Schmid favoring no cuts given the current level of inflation.
The decision regarding the balance sheet will keep the total value of the Fed's holdings stable month-over-month, starting December 1st, but will change its portfolio by reinvesting the income from maturing mortgage-backed securities into Treasuries.