What's happened
On September 18, 2024, the Federal Reserve cut its key interest rate by 0.5 percentage points to a range of 4.75% to 5%. This marks the first rate cut since 2020, aimed at supporting the cooling labor market while inflation trends downward. Further cuts are anticipated in the coming months.
Why it matters
What the papers say
According to Axios, the Fed's decision reflects a shift in focus from combating inflation to addressing labor market concerns, with Chair Jerome Powell emphasizing that the economy is fundamentally sound. The New York Times noted that the larger-than-usual cut signals the Fed's commitment to supporting employment amid signs of a cooling job market. Meanwhile, The Guardian highlighted that the Bank of England's decision to maintain its rates contrasts with the Fed's aggressive approach, indicating differing economic conditions between the U.S. and the UK.
How we got here
The Federal Reserve's decision to cut rates follows a series of aggressive hikes aimed at combating inflation, which peaked at 9.1% in June 2022. After 11 rate increases, inflation has decreased to 2.5%, prompting concerns about a cooling labor market and rising unemployment.
Common question
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How Will the Recent Federal Reserve Rate Cut Affect the Economy?
On September 18, 2024, the Federal Reserve made headlines by cutting interest rates for the first time in over four years. This decision has raised numerous questions about its implications for the economy, inflation, and various sectors. Below, we explore the most pressing questions surrounding this significant monetary policy change.
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How Did the Federal Reserve's Rate Cut Impact Global Markets?
On September 18, 2024, the Federal Reserve made headlines by cutting its key interest rate by 0.5 percentage points, the first reduction since 2020. This significant move has raised questions about its immediate and long-term effects on global markets, sectors that may benefit, and how other central banks are responding. Below, we explore these questions and more.
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What Does the Recent Fed Rate Cut Mean for the Economy?
On September 18, 2024, the Federal Reserve made headlines by cutting its key interest rate by 0.5 percentage points, the first reduction since 2020. This decision has raised numerous questions about its implications for the economy, consumers, and the job market. Below, we explore the most pressing questions surrounding this significant monetary policy change.
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How Will the Recent Federal Reserve Rate Cuts Affect the Economy?
The Federal Reserve's recent decision to cut interest rates has raised many questions about its impact on the economy. As the first rate cut since 2020, this move aims to support a cooling labor market while addressing inflation concerns. Here are some common questions people have about what this means for consumers, businesses, and the overall economic landscape.
More on these topics
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The Federal Reserve System is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics led to the desire for central control of the m
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Jerome Hayden "Jay" Powell is the 16th Chair of the Federal Reserve, serving in that office since February 2018. He was nominated to the Fed Chair position by President Donald Trump, and confirmed by the United States Senate.
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The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based.
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom or Britain, is a sovereign country located off the northÂwestern coast of the European mainland.
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Kamala Devi Harris is an American attorney and politician who has served as the junior United States Senator from California since 2017.