Fed cuts interest rates by a half point—the first time since 2020

BY Reuters2 minute read The Federal Reserve cut interest rates by half a percentage point on Wednesday, kicking off what is expected to be a steady easing of monetary policy with a larger-than-usual reduction in borrowing costs that followed growing unease about the health of the job market. "The committee has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in balance," policymakers on the U.S.

central bank's rate-setting committee said in their latest statement, which drew a dissent from Michelle Bowman, a member of the Reserve's Board of Governors, who favored only a quarter-percentage-point cut. Policymakers see the Fed's benchmark rate falling by another half a percentage point by the end of this year, another full percentage point in 2025, and by a final half of a percentage point in 2026 to end in a 2.75%-3.



00% range. The endpoint reflects a slight upgrade, from 2.8% to 2.

9%, in the longer-run...

Reuters.