BREAKING NEWS

Federal Reserve cuts key rate by sizable half-point, signaling end to its inflation fight

Sep 18, 2024, 12:42 PM | Updated: 2:04 pm

FILE: A detail of the Federal Reserve building in Washington is shown on Nov. 26, 2020. On Wed., Se...

FILE: A detail of the Federal Reserve building in Washington is shown on Nov. 26, 2020. On Thursday, Sept. 18, the central bank slashed a key lending rate by .5%.(J.Scott Applewhite, Associated Press)

(J.Scott Applewhite, Associated Press)

WASHINGTON (AP) — The Federal Reserve on Wednesday cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation but also made borrowing painfully expensive for American consumers.

The rate cut, the Fed’s first in more than four years, reflects its new focus on bolstering the job market, which has shown clear signs of slowing. Coming just weeks before the presidential election, the Fed’s move also has the potential to scramble the economic landscape just as Americans prepare to vote.

The central bank’s action lowered its key rate to roughly 4.8%, down from a two-decade high of 5.3%, where it had stood for 14 months as it struggled to curb the worst inflation streak in four decades. Inflation has tumbled from a peak of 9.1% in mid-2022 to a three-year low of 2.5% in August, not far above the Fed’s 2% target.

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Federal Reserve cuts key rate by sizable half-point, signaling end to its inflation fight