Federal Reserve Cuts Interest Rates by Half a Percentage Point for First Time in Four Years

The rate cut signals a shift in focus from combating inflation to supporting the weakening job market.

The Federal Reserve reduced its key interest rate to 4.8%, down from 5.3%, marking the first rate cut since March 2020.
Fed Chair Jerome Powell indicated that inflation has largely been controlled, with rates now aligning closer to the 2% target.
The decision comes just weeks before the presidential election, potentially impacting the economic landscape as voters head to the polls.
Further rate cuts are anticipated, with the Fed planning additional reductions in November, December, and throughout 2025 and 2026.
The rate cut aims to lower borrowing costs for consumers and businesses, potentially boosting spending, investment, and economic growth.