Thu Sep 19 03:33:59 UTC 2024: ## Fed Cuts Interest Rates by Half a Percentage Point, Signaling Easing of Monetary Policy
**WASHINGTON, D.C.** – The US Federal Reserve on Wednesday announced a half-percentage-point cut in interest rates, initiating what is expected to be a gradual easing of monetary policy. The decision, larger than the typical quarter-point reduction, was driven by growing concerns about the health of the job market.
Despite inflation remaining slightly elevated, the Fed’s rate-setting committee cited progress on price stability and a balanced risk outlook as key factors in their decision. The committee projects further rate cuts in the coming years, aiming to reach a range of 2.75% to 3.00% by 2026.
The Fed’s statement indicated a growing confidence that inflation is sustainably heading toward its 2% target, and that the risks to achieving its employment and inflation goals are roughly balanced. However, the committee remains prepared to adjust its monetary policy stance as needed to address potential risks that could impede its objectives.
The size of the initial cut has sparked questions about the Fed’s strategy, with some analysts wondering whether it reflects a desire to account for the rapid decline in inflation or address concerns about a potential slowdown in the job market.
The Fed’s projections indicate an unemployment rate ending this year at 4.4%, higher than the current 4.2%, and remaining at that level through 2025. Economic growth is forecast at 2.1% through 2024 and 2% in 2025.
The Fed’s policy meeting this week was its last before the upcoming US presidential election, scheduled for November 5th. Fed Chair Jerome Powell will hold a press conference later today to discuss the policy decision and the economic outlook.
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