WASHINGTON, Sept. 18 (Xinhua) -- The U.S. Federal Reserve on Wednesday slashed interest rates by 50 basis points amid cooling inflation and a weakening labor market, marking the first rate cut in over four years.
"The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance," the Federal Open Market Committee (FOMC), the central bank's policy-setting body, said in a statement.
"In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent," the FOMC said.
This signals the start of an easing cycle. Starting from March 2022, the Fed had raised rates consecutively for 11 times to combat inflation not seen in forty years, pushing the target range for the federal funds rate up to between 5.25 percent and 5.5 percent, the highest level in over two decades.
After maintaining rates at the high level for over a year, the Fed's tight monetary policy faced pressure to pivot due to the easing of inflationary pressures, signs of weakening in the job market, and slowing economic growth.
