The FOMC just announced it cut the fed funds and discount rates by 25 basis points. This leaves the fed funds rate at 2.00% and the discount rate at 2.25%.
The Fed said economic activity remains weak, while inflation expectations are picking up. It noted the substantial easing should promote growth. This action had two dissensions, with both Plosser and Fisher preferring no change. As a reminder, the Fed cut rates by 75 basis point at its March 18 meeting, with Fed presidents Fisher and Plosser dissenting, as they preferred less aggressive action. The stock market had a positive reaction immediately following the release.
