USA:The economy slowed and the Federal Reserve lowered interest rates

In line with the slowdown in US economic growth, the Federal Reserve cut interest rates for the third time in a row. What does this measure mean?

The trade war with China and the global economic slowdown continue to take their toll on the United States: according to the Commerce Department, the growth of the Gross Domestic Product in the third quarter was 1.9%, lower than that of the two previous quarters.

The financial market was already taking a slowdown for granted, but a greater contraction in business investment was offset by stability in household spending and meant that the negative impact of economic activity was less than expected by analysts.

“Today's report shows that the economy continues its steady growth defying skeptics who talk of a recession,” Commerce Secretary Wilbur Ross said on Twitter.

Between April and June 2019, the economy had grown at a rate of 2%, while in the first three months of the year it had grown at 3.1%. Even so, GDP is growing within its potential range, which is between 1.7% and 2%.

For President Donald Trump, the figure is good news: “The largest economy in the history of the United States,” he tweeted once the macroeconomic data was known.

End to falling interest rates?

In line with the slowdown in growth, this Wednesday, October 30, the Federal Reserve (FED) also announced a cut in interest rates for the third consecutive time , the main effect of which, in practice, is that it makes credits such as the consumer and mortgage.

The rate was reduced by a quarter of a percentage point (0.25 points) to a range between 1.5% and 1.75%. “Although household spending has risen at a strong pace, business investments and exports remain weak,” the interest-rate-setting committee said in a statement.

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