Northern Trust - The FOMC lowered the federal funds rate and discount rate 75 bps to 2.25% and 2.50%, respectively. Fed Presidents Plosser and Fisher dissented and would have preferred less aggressive action. The Fed has lowered the federal funds rate from 5.25% to 2.25% in a six-month period, which works out to a 600 bps cut on an annualized basis. By contrast, the Fed raised the federal funds rate from 1.00% to 5.25% at a slower pace and extended the tightening cycle over a two-year period. The Fed's concern about financial market stress and economic growth are the main reasons for today's move.
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