Federal Reserve cuts interest rates by half-point; first rate reduction in four years
Fed Reserve Chair Jerome Powell holds press conference after announcing highly anticipated decision on interest rates.
The Federal Reserve on Wednesday announced a long-awaited interest rate cut, lowering the benchmark rate by 50 basis points from what was the highest level in 23 years as the central bank eased borrowing costs following progress in the fight against inflation.
The Fed's first interest rate cut since March 2020 lowers the benchmark federal funds rate to a range of 4.75% to 5%.
Interest rates had been at a range of 5.25% to 5.50% since July 2023, the highest level since 2001, as the central bank monitored economic data for signs that stubborn inflation was trending toward its 2% target.
Recent months delivered signs of progress that inflation is heading toward the Fed's target, although the latest data showed it isn't quite there yet. Inflation slowed to 2.5% on an annual basis in August, down from 2.9% the month before and well below this inflationary cycle's peak of 9.1% in June 2022.
US ECONOMISTS SEND FED WARNING ON PRICE INCREASES AHEAD OF ANTICIPATED RATE DECISION: 'BE CAUTIOUS'
Fed Chair Jerome Powell announced the central bank's move to lower interest rates for the first time in four years. (Photo by ROBERTO SCHMIDT/AFP via Getty Images / Getty Images)
Federal Reserve Chair Jerome Powell said in a press conference following the announcement that the central bank is focused on «achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people.»
«Our economy is strong overall and has made significant progress toward our goals over the past two years,» Powell said. «This decision reflects our growing confidence that with an appropriate recalibration of
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