Federal Reserve cuts rates by 50bps amid growing confidence in economy

Largest cut in four years

Sorin Dojan
clock • 3 min read

The US Federal Reserve has cut its current federal funds rate by 50 basis points, bringing it down to a range of 4.75%-5%.

The Fed's move comes on the back of growing confidence in US economic data and after annual inflation dropped to 2.5% in August, beating market expectations. Eleven members of the Federal Open Market Committee (FOMC) voted in favour of the 0.5 percentage point cut, with one member, Michelle Bowman, opting instead for a quarter-point reduction. The cut was also the largest taken by Fed policymakers since 2020, when the Covid-19 pandemic struck. Fed rate cut a 'near certainty' as US inflation drops to 2.5% beating expectations In his speech on Wednesday (18 September), Fed chair J...

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