STORY: U.S. Fed slashes interest rates by 25 basis points amid weakening labor
SHOOTING TIME: Nov. 7, 2024
DATELINE: Nov. 8, 2024
LENGTH: 00:01:29
LOCATION: Washington D.C.
CATEGORY: ECONOMY

SHOTLIST:
1. various of the press conference
2. SOUNDBITE (English): JEROME POWELL, U.S. Federal Reserve Chair
3. various of the press conference

STORYLINE:

The U.S. Federal Reserve on Thursday slashed interest rates by 25 basis points amid cooling inflation and a weakening labor market, marking the second rate cut in this easing cycle.

"Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated," the Federal Open Market Committee (FOMC), the central bank's policy-setting body, said in a statement.

In support of its goals, the committee decided to lower the target range for the federal funds rate by 0.25 percentage points to 4.5 percent to 4.75 percent, the statement said.

The Fed's latest decision came after a weak employment report, which showed that U.S. employers added only 12,000 jobs in October, amid a cooling labor market. This slowdown was exacerbated by the strike and impact of recent hurricanes.

The latest report also revised down employment for August and September, to a gain of 78,000 and a gain of 223,000, respectively. With these revisions, employment in the two months combined is 112,000 lower than previously reported.

After its Sept. 17-18 meeting, the central bank slashed the target range for the federal funds rate by 50 basis points, which marked the first rate cut in over four years and signaled the start of an easing cycle.

At a press conference after the Fed's two-day policy meeting, Fed Chair Jerome Powell noted that inflation has eased significantly over the past two years, but core inflation remains somewhat elevated.

SOUNDBITE (English): JEROME POWELL, U.S. Federal Reserve Chair
"The economy is strong overall and has made significant progress toward our goals over the past two years. The labor market has cooled from its formerly overheated state and remains solid. Inflation has eased substantially from a peak of 7 percent to 2.1 percent as of September. We are committed to maintaining our economy's strength by supporting maximum employment and returning inflation to our 2 percent goal. Today, the FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by a quarter percentage point. We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained with inflation moving sustainably down to 2 percent. We also decided to continue to reduce our securities holdings."

Total Personal Consumption Expenditures (PCE) prices -- the Fed's preferred inflation gauge -- rose 2.1 percent over the 12 months ending in September. Excluding the volatile food and energy categories, core PCE prices rose 2.7 percent. "The job is not done on inflation," said Powell.

The Fed chair noted the committee is in the process of "recalibrating" from a "fairly restrictive level," noting that the target range for the federal funds rate has been lowered by 75 basis points following two consecutive cuts.

Powell acknowledged that despite the economy performing well, Americans are still feeling the effects of high prices. "It takes some years of real wage gains for people to feel better," he said.

The latest FOMC meeting came shortly after the 2024 U.S. presidential election, in which former President Donald Trump -- the Republican candidate -- won by a landslide on issues including inflation, immigration, and Middle East conflicts.

Powell said that in the near term, the election will have no effect on the Fed's policy decisions.

Xinhua News Agency correspondents reporting from Washington D.C.
(XHTV)