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The Federal Reserve today cut short-term interest rates. The FOMC also decided to buy short-term bonds to support lower rates.

The rate-setting FOMC remained split, with a 9-3 vote, with some members favoring cuts to head off further weakness in the labor market and others who think easing has gone far enough and threatens to aggravate inflation, wrote CNBC.

• President Donald Trump said the Federal Reserve’s latest decision to cut benchmark interest rates by a quarter percentage point could have been “at least doubled.”
• Trump, who has long urged the central bank to slash rates in order to spur further economic growth, called Fed Chair Jerome Powell “a stiff” who approved a “rather small” cut.

The Fed said reserve balances have declined to ample levels and will use shorter-term Treasury purchases when needed to maintain sufficient reserves. October's balance-sheet guidance, "the Committee decided to conclude the reduction of its aggregate securities holdings on December 1" is removed; instead, December adds new guidance: “the Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves," added Zero Hedge.

"Bond buying is back! Expected rate cut. Not as hawkish as I expected in the press conference," declared CDM markets contributor Tom Teague.

This is a good analysis here.

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