Federal Reserve cuts interest rates by 50 basis points for the first time since March 2020

The US Federal Reserve announced a 50 basis point cut in interest rates for the first time since March 2020, to a range of 5% – 4.75%.

After nearly taming inflation, the US Federal Reserve on Wednesday cut its benchmark interest rate by half a percentage point for the first time in four years, a move that will lower borrowing costs for consumers and businesses just weeks before the presidential election.

The US Federal Reserve issued its first rate cut since the early days of the Covid pandemic, cutting half a percentage point from its benchmark interest rate in an attempt to avoid a slowdown in the labor market.

With the jobs and inflation picture deteriorating, the central bank’s Federal Open Market Committee opted to cut its key overnight borrowing rate by half a percentage point, or 50 basis points, confirming market expectations that had recently shifted from expectations for a cut of half a percentage point.

Aside from emergency interest rate cuts during Covid, the last time the Federal Open Market Committee cut by half a point was in 2008 during the global financial crisis.