The US Federal Reserve (Fed) is responding to falling inflation and is cutting its policy rate for the first time since the outbreak of the coronavirus pandemic. The Fed has announced that the key interest rate will now be cut by 0.5 percentage points to a range of 4.75 to 5.00 percent.
The Fed had previously not changed its interest rates for fourteen months in a row. Most bank economists had expected only a rate cut of 0.25 percentage points. Recently, however, expectations on the financial markets had increased that a rate cut of 0.5 points could also come.
The range was last raised by 0.25 percentage points in July 2023. In the fight against inflation, the Fed has raised interest rates sharply. In early March 2022, the interest rate range was between zero and 0.25 percent.
Inflation fell to 2.5 percent in August. In 2022, it was sometimes over 9 percent. However, interest rates are currently still above the Fed’s inflation target of two percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
