US Bureau of Economic Analysis (BEA) quarterly GDP reports

Federal Reserve Cuts Interest Rates by 50 Basis Points to 4.75%-5.00% in First Cut Since 2020

Sep 18, 2024, 06:07 PM

The Federal Reserve has cut its benchmark interest rate by 50 basis points, reducing it to a range of 4.75% to 5.00%. This marks the first rate cut since March 2020 and is a more aggressive move than the widely anticipated 25 basis points reduction. The decision comes amid concerns about rising unemployment, lower-than-expected job growth, and lingering inflation concerns, signaling economic concerns and potential recession. The rate cut is expected to lower borrowing costs for consumers and businesses and is seen as a step to bolster the US labor market. The Federal Reserve has also indicated that further rate cuts may follow this year. Notably, the decision was nearly unanimous, with only one dissent in favor of a smaller 25 basis points cut. The current rate reduction comes after the fed funds rate stood at a 23-year high of 5.25%-5.50%.