Fed Announces Big Rate Cut “We concluded that this was the right thing for the economy and the people we serve,” the Federal Reserve chair, Jerome Powell, said, referring to the central bank’s decision to cut interest rates by half a point. Sept. 18, 2024

 Fed Announces Big Rate Cut

“We concluded that this was the right thing for the economy and the people we serve,” the Federal Reserve chair, Jerome Powell, said, referring to the central bank’s decision to cut interest rates by half a point.

Sept. 18, 2024

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Jeanna Smialek

Jeanna SmialekReporting from Washington

Takeaways from the Fed’s rate cut decision.

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Federal Reserve Cuts Interest Rates for the First Time in Four Years

Jerome H. Powell, the Fed chair, said that the central bank would take future interest rate cuts “meeting by meeting” after lowering rates by a half percentage point, an unusually large move.

Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by lowering our policy interest rate by a half percentage point. Our patient approach over the past year has paid dividends. Inflation is now much closer to our objective, and we have gained greater confidence that inflation is moving sustainably toward 2 percent. We’re going to take it meeting by meeting. As I mentioned, there’s no sense that the committee feels it’s in a rush to do this. We made a good, strong start to this, and that’s really, frankly, a sign of our confidence — confidence that inflation is coming down.

Federal Reserve Cuts Interest Rates for the First Time in Four Years

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Jerome H. Powell, the Fed chair, said that the central bank would take future interest rate cuts “meeting by meeting” after lowering rates by a half percentage point, an unusually large move.CreditCredit...Tom Brenner/Reuters

The Federal Reserve cut interest rates on Wednesday by half a percentage point. Here are some takeaways from the decision and from remarks by the Fed chair, Jerome H. Powell.

The Fed’s decision lowers rates to about 4.9 percent, down from a more than two-decade high.

Fed officials lowered interest rates because they are confident that inflation is coming back down to their 2 percent goal, and now they want to prevent the job market from softening further.

Central bankers expect to cut interest rates more in the months to come, but they are not on a preset path, Mr. Powell said. They could speed up if the economy is weak and slow down if it’s strong.

The Fed is keeping a wary eye on the uptick in unemployment, but for now it thinks the economy is basically strong.

The Fed is feeling “growing confidence” that it can pull off the soft economic landing by lowering interest rates.

In short, the Fed has pivoted to its rate cutting era, and there is more to come.