The Federal Reserve cut interest rates by a quarter percentage point Wednesday in an effort to support an economy that continues to tap the brakes.
In announcing the move, the central bank pointed to weak business investment, which has been a drag on the economy, even as consumer spending has held up relatively well.
This is the Fed's third interest rate cut since July, and it brings the federal funds rate target down to a range of 1.5% to 1.75%. Falling interest rates have contributed to a modest rebound in the housing market and big-ticket consumer purchases. But they've done little so far to boost business investment.
Many businesses are wary about spending money in the face of slowing global demand and uncertainty surrounding the president's trade war.
The Commerce Department reported Wednesday that economic growth slowed in the third quarter to just 1.9%. The report showed the Fed's preferred measure of inflation reached 2.2% during the quarter, slightly above the central bank's 2% target.
"Although household spending has been rising at a strong pace, business fixed investment and exports remain weak," the Fed said in a statement.
Two members of the rate-setting committee — Esther George and Eric Rosengren — voted against the cut, preferring to leave rates unchanged.
Wednesday's rate cut was widely anticipated.
The central bank kept its options open for its next rate-setting meeting, in December, saying officials would continue to monitor economic developments. But language promising to "act as appropriate to sustain the expansion" was dropped, suggesting the Fed may not anticipate a need for a fourth rate cut later this year.
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