Federal Reserve cuts interest rates by half-point; first rate reduction in four years

he Federal Reserve on Wednesday announced a long-awaited interest rate cut, lowering the benchmark rate by 50 basis points from what was the highest level in 23 years as the central bank eased borrowing costs following progress in the fight against inflation.

The Fed's first interest rate cut since March 2020 lowers the benchmark federal funds rate to a range of 4.75% to 5%.

Interest rates had been at a range of 5.25% to 5.50% since July 2023, the highest level since 2001, as the central bank monitored economic data for signs that stubborn inflation was trending toward its 2% target.