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US interest rate cut was 'insurance,' policy now in 'good place': Federal Reserve's Powell
[WASHINGTON] Federal Reserve Chairman Jerome Powell said on Wednesday the latest interest rate cut was designed to buoy the US economy but he confirmed that the central bank is unlikely to move again unless the situation deteriorates.
The FOMC lowered the policy interest rate by 25 basis points to a target range of 1.5-1.75 per cent, as expected, pulling back another of the four interest rate increases it implemented in 2018.
"We took this step to help keep the US economy strong in the face of global developments, and to provide some insurance against ongoing risks," Mr Powell told reporters.
Following the Fed's third consecutive rate cut this year, Mr Powell said, "we believe that monetary policy is in a good place," adding that it was "likely to remain appropriate."
Added to a key change in the language of the statement issued by the policy-setting Federal Open Market Committee, the comments cement the view the Fed is for now unlikely to cut rates again in the final meeting of the year.
Pressed to explain under what conditions policymakers would favour another dose of stimulus, Mr Powell said, "if developments emerge that cause a material reassessment of our outlook, we would respond accordingly."
He pointed to trade tensions and Brexit as factors crimping business investment and manufacturing, but "overall we see the economy as having been resilient to the winds that have been blowing this year."
But with signs of a possible "phase one" trade deal with China and the diminished risk of a no-deal Brexit, though "there is plenty of risk left but I would have to say the risks seem to have subsided."