Policymakers voted 11-to-1 to reduce the US central bank’s benchmark lending rate to a range of 4.75 percent to 5.00 percent, according to a statement from the Fed.
The US Federal Reserve on Wednesday lowered its key lending rate by half a percentage point, marking its first reduction since the pandemic. This move significantly reduces borrowing costs just ahead of the November presidential election.
Policymakers voted 11-to-1 to reduce the US central bank’s benchmark lending rate to a range of 4.75 percent to 5.00 percent, according to a statement from the Fed.
“This decision reflects our growing confidence that with an appropriate recallibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2%,” Fed Chair Jerome Powell said post the meeting.
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This week’s Fed policy meeting was the last one before voters head to the polls for what is anticipated to be a tightly contested U.S. presidential election on November 5.
Policymakers anticipate that the Fed’s benchmark rate will decrease by an additional half percentage point by the end of this year, followed by a full percentage point reduction in 2025, and a final half percentage point drop in 2026, ultimately settling in a range of 2.75% to 3.00%.
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On Wednesday, major stock indexes climbed and the dollar fell following the US Federal Reserve’s decision to lower its key lending rate.
(With Reuters inputs)
