FED cuts key interest rates for the first time in four years

(Patria) - The US central bank, the Federal Reserve (FED), yesterday decided to cut the key interest rate by 50 basis points (0.50 percent).

The FED's decision to cut rates is the first in more than four years and reflects a new focus on strengthening the labor market, which has shown clear signs of slowing down, AP reported.

The agency states that the US central bank lowered its key rate to approximately 4.8 percent, down from a two-decade high of around 5.3 percent, where it had been for 14 months, while fighting to curb the worst inflation streak in four decades.

The interest rate was previously at an official level of 5.25 - 5.50 percent.

Inflation has fallen from a high of 9.1 percent in mid-2022 to a three-year low of 2.5 percent in August, from the FED's target of two percent.

FED policymakers also hinted that they expect to cut their key rate by an additional half a point at the last two meetings this year, in November and December, and predict four more rate cuts in 2025 and two in 2026.