Jerome Powell, the head of the bank, said the move was "strong" but that it was needed as price rises ease and job market concerns grow. Wed

US goes big with first interest rate cut in four years

submited by

Style Pass

2024-09-19 16:30:16

Jerome Powell, the head of the bank, said the move was "strong" but that it was needed as price rises ease and job market concerns grow.

Wednesday's cut was larger than many analysts had predicted just a week ago, and the bank's forecast signalled that rates could fall another half percentage point by the end of the year.

Federal Reserve chair Jerome Powell said the aggressive action on Wednesday was intended to make sure that high borrowing costs, put in place to fight inflation, would not end up hurting the US economy.

"The labour market is in a strong place - we want to keep it there," Mr Powell said. "That's what we're doing."

The move by the Fed follows cuts by other central banks, including those in Europe, the UK, and Canada and a reduction was widely expected.

"Despite there being no significant economic woes on the radar, policy makers have decided to get ahead of the curve," said Isaac Stell, investment manager at Wealth Club, a UK investment service.