Federal Reserve Chair Jerome Powell
© Josh Morgan / USA TODAY NETWORK
(Washington, DC) — The Federal Reserve is cutting interest rates for the first time in more than four years. The Central Bank cut rates by half-a-point.
The decision lowers the federal funds rate to a range between four-point-75-percent to five-percent. Interest rates had remained at their highest level in over two decades since July of last year. The Fed had maintained a goal of lowering inflation to two-percent.
August saw the 12-month inflation rate fall to two-and-a-half-percent, its lowest level since February 2021.
Investors are happy about the move by the Feds, which many see as an effort to deal with the slowdown in the labor market, and also with inflation cooling. Investors say the Federal Reserve interest rate cut has an added significance with the presidential election just weeks away. Historically, it’s the closest the central bank has come in enacting an easing cycle just before an election in nearly half a century. A brand new rate-cutting phase tied this close to November 5th has happened only twice before now — in 1976 and in 1984.
