In a widely expected move, the U.S. Federal Reserve on Wednesday announced a quarter-point interest rate cut, bringing the benchmark rate down to a range of 4% to 4.25%. This marks the first rate cut since December 2024 and takes borrowing costs to their lowest level since November 2022.
The decision comes against the backdrop of a weakening labor market, with policymakers aiming to provide support to the slowing economy. Analysts had anticipated the move following Fed Chair Jerome Powell’s speech at Jackson Hole on August 22, where he hinted at the possibility of rate cuts in the coming months but refrained from committing to a timeline.
Markets had largely priced in the reduction, viewing it as part of the Fed’s cautious approach to balancing inflation concerns with the need to sustain economic growth.
