FOMC lowers federal funds rate by 25 basis points to 1.75% - 2% range as expected

• Fed lowers the target range for fed funds rate steady at 1.75% - 2%.
• FOMC votes in favour of policy were 7 to 3.
• US Dollar Index spiked above 98.40 with the initial reaction. 

Following its 2-day meeting, the Federal Open Market Committee announced that it lowered the benchmark interest rate by 25 basis points to the target range of 1.75% - 2% in a widely expected decision. Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, is scheduled to deliver his comments on the monetary policy outlook in a press conference at 18:30 GMT. 

With the initial reaction, the US Dollar Index gained traction and rose to a session high above 98.40.

Key highlights from the press release (via Reuters)

"Fed policymaker projection is for no further cuts in 2019 but seven of 17 policymakers saw one more cut as appropriate."

"Fed vote in favour of policy was 7 to 3, Bullard wanted a 50 bp cut, George and Rosengren wanted no change to rates."

"Fed sets interest on excess reserves rate at 1.80%, widening the spread from top of target range to 20 bp from 15 bp, to better control its policy rate."

"Fed sets offering rate for overnight repos at 1.70%, 5 bp below bottom of fed funds target range."

"Will continue reinvesting principal payments from its portfolio holdings."

"Labor market remains strong, economic activity has been rising at moderate rate."

"Household spending rising at a strong pace, but business fixed investment and exports have weakened."

"Inflation is running below 2%."

"Will continue to monitor incoming information, act 'as appropriate' to sustain the expansion."