Monetary policy

Why has the Federal Reserve cut interest rates?

• The Fed has cut interest rates in 2019 for the first time in 11 years. However, it has barely lowered its growth outlook for the US and has justified the cut with the weakness of inflation and the persistence of risks. • Is it possible that the Fed has changed its reaction function? The results of the analysis in this article suggest so. However, this is not the first time that the Fed has responded more to the risks than the data themselves, and this shift could be explained...