1. SOUNDBITE (English) Jonathan Corpina, Meridian Equity Partners
"Pretty much what we got today was as expected the market already had that priced into it. I think if the Fed would have done anything other than cutting it a quarter point we would have seen a real serious reaction to that."
2. Traders on floor of NYSE receive news from TV about prime rate cut
New York - 31 July 2019
3. Closing Big Board number showing DJIA down
New York - 31 July 2019
4. SOUNDBITE (English) Jonathan Corpina, Meridian Equity Partners
"I think the Fed has kind of painted themselves into a corner where they've been talking about how strong our economy is and how things are going well. But yet overall when you look at from a global point of view there's a lot of uncertainty that's out there. Global growth has slowed down and we continue to talk about tariffs and the implications of that."
5. Traders watching stock prices
Washington - 31 July 2019
6. SOUNDBITE (English) Mark Hamrick, Bankrate.com
"I think we can take chairman Jerome Powell at his word that essentially this is a kind of insurance for the U.S. economy. Let's think about the fact that in the last series of rate increases we had nine rate hikes and the Fed is simply taking back one of those. You do the math that's eleven percent so I don't look at this as a significant move in the sense of undoing a lot of what the Fed has done over the past several years. But the Fed is seeing a number of signs on the horizon that are related to slowing global growth, rising trade tensions not only with the U.S. and China but around the world. And it's also failed to hit its much discussed two percent inflation target. Inflation has been running below a level that the Fed is comfortable with and so by trying to lower interest rates very slightly it believes that it's going to get closer to its goals of keeping the U.S. economic expansion going and perhaps get a little closer to its inflation target."
The Federal Reserve cut its key interest rate Wednesday for the first time in a decade to try to counter threats ranging from uncertainties caused by President Donald Trump's trade wars to chronically low inflation and a dim global outlook.
Stocks tumbled soon after the Fed issued its statement at 2 p.m. Eastern time.
The Dow Jones Industrial Average, which had been nearly flat before the announcement, sank about 300 points an hour later just as Chairman Jerome Powell was holding a news conference.
Investors seemed disappointed that Powell said the Fed doesn't envision a long series of rate cuts to follow Wednesday's.
But later in his news conference, he seemed to shift his message to leave open the possibility that the Fed would cut rates again. Stocks then pared their losses, but dropped to close down more than 300 points.
On the floor of the NYSE, trader Jonathan Corpina said investors had largely factored into the market the rate cut before Powell's announcement.
The central bank reduced its benchmark rate — which affects many loans for households and businesses — by a quarter-point to a range of 2% to 2.25%. It's the first rate cut since December 2008 during the depths of the Great Recession, when the Fed slashed its rate to a record low near zero and kept it there until 2015.
The economy is far healthier now despite risks to what's become the longest expansion on record.
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