On October 30, 2019, the Federal Reserve’s Open Market Committee voted by an 8-2 margin to lower the Fed Funds rate by a quarter of a point to a range of 1.50-.75%. This action was the third time the Fed has decided to cut rates this year. The Fed statement suggested that the FOMC will take time to study the economic and monetary conditions over the next several months with no suggestion of near-term additional rate cuts.
The Fed also voted unanimously to lower the rate it pays banks on required and excess reserves balances to 1.55%. This action will make holding excess reserves at the Fed less attractive and will presumably motivate banks to reduce excess reserves and increase commercial lending activities to support the U.S. economy.