The Fed's decision will lower borrowing costs from a 23-year high as the central bank pivots to shoring up economic growth.
The Federal Reserve on Wednesday said it is cutting its benchmark interest rate by 0.50 percentage points, marking the first reduction in four years and moving to ease borrowing costs as inflation-weary consumers are grappling with high rates on everything from mortgages to credit cards. The Fed said the cut lowers the federal funds rate into a range of 4.75% to 5%, down from its prior range of 5.25% to 5.5%, which had been its highest level in 23 years.
In its Wednesday statement, the Fed cited its decision to make a larger cut 'in light of the progress on inflation and the balance of risks.''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,' the Fed said in the statement. 'The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
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