WASHINGTON — For the first time in more than a decade, the Federal Open Market Committee (FOMC) of the Federal Reserve System has lowered a key interest rate.
The FOMC said July 31 that it had lowered the target range of the federal funds rate — the rate at which banks lend to other banks — a quarter point, to 2% to 2.25%.
The committee said it chose to lower the rate "in light of the implications of global developments for the economic outlook as well as muted inflation pressures."
Expansion of economic activity, a strong labor market and inflation near the Fed's 2% goal are the most likely outcomes of the rate reduction, but uncertainties about that outlook remain, the committee said.
"As the committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion," it said.