Fed lowers interest rates by half point in first cut since 2020

Published On Sep 18, 2024, 2:03 PM

The Federal Reserve has cut interest rates by 0.50% to a new range of 4.75%-5.0%, marking its first rate cut since 2020. This decision, made during a split vote, reflects the Fed's response to a slowing labor market and signs that inflation may be trending down toward its 2% target. Along with this cut, the Fed indicated that it plans further rate reductions in the future: two additional cuts this year, four in 2025, and more cuts in subsequent years if necessary. The central bank is balancing inflation expectations with labor market conditions, which have been cooling recently.