Federal Reserve cuts interest rates by half a percentage point, larger than expected
The Federal Reserve has reduced its benchmark interest rate by half a percentage point, marking a significant shift in economic policy.
The Federal Reserve has reduced its benchmark interest rate by half a percentage point, marking a significant shift in economic policy.
The Federal Reserve has reduced its benchmark interest rate by half a percentage point, marking a significant shift in economic policy.
The Federal Reserve has slashed its benchmark interest rate by half a percentage point, marking the first rate cut in four years and signaling a shift in economic priorities.
"The Federal Open Market Committee reduced the degree of policy restraint by lowering our policy interest rate a half percentage point," Federal Reserve Chair Jerome Powell said.
The rate cut provides relief for Americans burdened by record-breaking credit card debt.
"Your rates are really, really high. Average rate is almost 21% that rate will stair step lower as the Federal Reserve cuts rates," said Greg McBride, chief financial analyst at Bankrate.com.
Experts believe the rate cut could revive the stagnant housing market.
"There isn't much activity because of how high rates are," said Daryl Fairweather, chief economist at Redfin.
The decision also marks a significant milestone in the fight against inflation, which has driven prices up by more than 21% since 2020.
"Our patient approach over the past year has paid dividends and we have gained greater confidence inflation is coming down to 2%," Powell said.
The Federal Reserve's new focus is on bolstering a job market that shows signs of slowing.
"The focus has shifted from inflation being the most watched release on the economic calendar every month to now it's about jobs," McBride said.
Powell emphasized the importance of monitoring the labor market closely.
"If the labor market were to slow unexpectedly, we have the ability to react to that by cutting faster," Powell said.
Powell dismissed concerns that the Federal Reserve may have delayed rate cuts for too long.
"The U.S. economy is in a good place. The decision today is designed to keep it there," Powell said.
The Federal Reserve's decision comes just weeks before the presidential election, potentially influencing voter perceptions of the economy, a key issue for both campaigns.
Powell indicated that the Federal Reserve expects to cut its key rate in its final two meetings this year, in November and December.
He also envisions four more rate cuts in 2025 and two in 2026.