Butterfield responds to Fed’s move on interest rates
Butterfield Bank is reducing its base interest rates on loans and mortgages by one quarter of a percentage point, the lending institution said tonight.
The move comes in response to today’s decrease in the target range of the US Federal Funds Rate.
The bank said the change in base rates applied to Bermuda dollar residential mortgages, consumer loans, corporate loans and US dollar loans.
The rate reduction on loans takes effect on September 22. For existing Bermuda residential mortgages, it goes live 90 days later.
The Federal Open Market Committee of the Federal Reserve, in a much anticipated move, lowered the target range for the federal funds rate by 0.25 percentage points to between 4 per cent and 4.25 per cent.
In today’s announcement, Fed officials indicated they expected two more quarter-point rate cuts this year.
One Fed official, seen to be close to US President Donald Trump, sought a higher cut. The President has criticised Federal Reserve chair Jerome Powell for not cutting interest rates faster.
In a statement from the Governors of the Federal Reserve System, it was noted that considering additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook and the balance of risks.
The statement said: “The committee will continue reducing its holdings of treasury securities, and agency debt and agency mortgage‑backed securities. The committee is strongly committed to supporting maximum employment and returning inflation to its 2 per cent objective.”
The committee said it would be prepared to adjust the stance of monetary policy as appropriate if risks emerged that could impede the attainment of the committee’s goals.
The statement said: “The committee’s assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments.”
The Fed said there were indicators that growth of economic activity moderated in the first half of the year. Job gains have slowed and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated.
• For more on the Fed statement, see Related Media
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