Federal Reserve cuts interest rates for 1st time in over 4 years

CAIRO - 18 September 2024: The Federal Reserve has decided to lower interest rates by 50 basis points for the first time in over four years, bringing them to a range of 4.75 percent to 5 percent. 

 

This move marks the beginning of what is expected to be a consistent easing of monetary policy.

 

In their latest statement, policymakers from the Fed's interest rate committee noted that they gained greater confidence that inflation is moving sustainably toward the 2 percent target, and it believes that the risks to achieving both employment and inflation objectives are nearly balanced.

 

Policymakers anticipate that the Federal Reserve's benchmark interest rate will drop by another half percentage point by the end of this year, a full percentage point in 2025, and an additional half point by 2026, settling within the range of 2.75 percent to 3.00 percent.

 

The Federal Reserve had previously kept interest rates unchanged for the eighth consecutive time during its July meeting. 

 

For months, the Fed has maintained interest rates at their highest levels in 22 years in an effort to curb lending and cool rising prices. 

 

However, the slowdown in inflation last year sparked optimism that the first rate cut was on the horizon.