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The Federal Reserve held a meeting on September 19, 2023, where it decided to cut its interest rate by 25 basis points. The decision was supported by 11 out of 12 voting members, with the new member Steven Moran voting against the cut, advocating for a larger 50 basis point reduction. Despite acknowledging the current risks in the labor and housing markets, the Fed’s forward guidance showed uncertainty, with mixed signals reflected in the accompanying “dot plot.”
Key statistics include a labor market slowdown, with weekly unemployment claims reaching four-year highs and nearly one million jobs overstated in recent Bureau of Labor Statistics revisions. Furthermore, new housing starts have fallen to an annual pace of 1.3 million, indicating a declining construction outlook.
The meeting’s outcomes suggest that concerns about economic stability persist, yet the Fed appears hesitant to take more aggressive actions to address these issues.
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