The FOMC cut the fed funds target rate range by 25 basis points to 4.50 to 4.75 percent, matching the consensus in the Econoday survey of forecasters. The FOMC took the action,"In support of its goals".

In the statement, the FOMC cited a"solid" pace of expansion since the prior meeting. The statement said,"Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated." Conditions in the labor market"generally eased, and the unemployment rate has moved up but remains low."

The latest statement left out any mention of the"greater confidence" that the FOMC had been seeking, implying that the committee is now fully confident that price stability is near relative to the 2 percent goal and that the risks have diminished. The statement said,"The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate."

Fed policymakers remain data-dependent and did not provide forward guidance beyond the repeating the recent wording of,"In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks."

Unlike the September 18 vote, the November 7 action had no dissents in the vote.

In related actions, the Board of Governors cut the discount rate by 25 basis points to 4.75 percent and lowered the interest rate paid of reserve balances to 4.65 percent. The FOMC made no change to the caps of reinvestments of US treasuries and agency mortgage-backed securities as they reduce the size of the Fed's balance sheet. The overnight repo offering rate is also reduced by 25 basis points to 4.55 percent.

Even with a mostly resilient economic performance, the consensus view remains that the Fed sees financial conditions as tighter than necessary to keep inflation headed down toward target. And the latest jobs report underlined worries about the labor market even if it was skewed lower by hurricanes and strikes. Forecasters see the Fed on track for another 25 basis point rate cut this week.

The FOMC meeting announcement is a policy statement issued at the conclusion of each meeting of the Federal Open Market Committee. It offers updates on economic conditions with special focus on the health of the labor market and the latest on inflation. It also updates the status of the federal funds target which is the FOMC's official policy interest rate. This rate is expressed within a range, such as 1.75 to 2.00 percent. The center of this range is the implied target. The higher this target, the more restrictive monetary policy becomes, the lower this target, the more accommodative policy becomes. Other policy tools are also discussed in the meeting announcement including updates on direct purchases of Treasuries and mortgage-backed securities. Debate is not offered in the statement, just the consensus view is expressed, though the statement does list the total committee vote and how each member voted.

The Fed determines interest rate policy at FOMC meetings. These occur roughly every six weeks and are the single most influential event for the markets. For weeks in advance, market participants speculate about the possibility of an interest rate change at these meetings. If the outcome is different from expectations, the impact on the markets can be dramatic and far-reaching.

The interest rate set by the Fed, the federal funds rate, serves as a benchmark for all other rates. A change in the fed funds rate, the lending rate banks charge each other for the use of overnight funds, translates directly through to all other interest rates from Treasury bonds to mortgage loans. It also changes the dynamics of competition for investor dollars. When bonds yield 5 percent, they will attract more money away from stocks than when they only yield 3 percent.

The level of interest rates affects the economy. Higher interest rates tend to slow economic activity; lower interest rates stimulate economic activity. Either way, interest rates influence the sales environment. In the consumer sector, fewer homes or cars will be purchased when interest rates rise. Furthermore, interest rate costs are a significant factor for many businesses, particularly for companies with high debt loads or who have to finance high inventory levels. This interest cost has a direct impact on corporate profits. The bottom line is that higher interest rates are bearish for the stock market, while lower interest rates are bullish.

The Fed also began quantitative easing during the past recession and, through direct purchases in the market, steadily increased its holdings of Treasuries and mortgage-back securities before pulling back from the program beginning in late 2017. Along with lowering its bond holdings, the Fed began to gradually raise its federal funds target until mid-2019 when, facing slowing global growth, it began to lower its target.

Frequency
Eight times a year.