For the first time since 2008, when the U.S. was deep in a recession, the Federal Reserve has decided to cut interest rates. The board will reduce interest rates by .25%, they announced on Wednesday.
Fed Chairman Jerome Powell held a press conference about the decision.
"We decided today to lower the target for the federal funds rate by a quarter of a percentage point to a range of 2 percent to 2-1/4 percent," he said in his opening statement. "The outlook for the U.S. economy remains favorable and this action is designed to support that outlook.
"It is intended to insure against downside risks from weak global growth and trade policy uncertainty; to help offset the effects these factors are currently having on the economy; and to promote a faster return of inflation to our symmetric 2 percent objective. All of these objectives will support achievement of our overarching goal: to sustain the expansion, with a strong job market and inflation close to our objective, for the benefit of the American people."
Business leaders like Alfredo Ortiz, president and CEO of the Job Creators Network, reacted well to the news.
“For the past year, JCN has been pushing for lower interest rates as the best way to accelerate growth," he said. "Our small business community was damaged by the Fed's rate increase last year, which is why we opposed their decision then, and why we are excited by their decision today. Small business owners rely on low rates to grow and invest, which means more employees and higher wages. Lower rates, combined with President Trump’s pro-growth policies, is exactly the prescription we need to push our economy to new heights.”
President Trump has previously criticized Powell for raising interest rates, even telling press, "I don't think he's done a good job." The chair was asked at today's presser whether or not Trump had influenced their latest decision, but he insisted politics did not play a part.