Federal Reserve cuts interest rates for first time in 4 years | Fox Business

The Nugget

The Federal Reserve cut interest rates by 50 basis points, marking its first reduction in four years as part of a strategy to combat inflation and stimulate economic growth.

Make it stick

📉 The Fed lowered interest rates to a range of 4.75% to 5%, the first cut since March 2020.
📊 Inflation is slowing, down to 2.5% in August from a high of 9.1% in June 2022.
📰 Fed Chair Jerome Powell emphasized the decision reflects confidence in the economy's strength and progress.
⚖️ Powell noted the Fed aims for a dynamic approach, adjusting decisions based on ongoing economic data.

The Fed's recent cut marks a significant transition in monetary policy, aimed to provide relief amid economic uncertainties.
This is the largest cut since March 2020, targeting a reduction in borrowing costs to stimulate economic activity.

Inflation decreased to 2.5% in August 2024, showing improvement from the previous months.
The Fed is optimistic about continuing to drive inflation towards its 2% goal.
Powell indicated that waiting for inflation to hit 2% before acting could be too late.

The Fed's focus remains on achieving maximum employment and stable prices.
Powell expressed confidence that the current labor market is robust, mitigating concerns of a potential recession.
The Fed plans to make data-driven decisions in its future policy meetings based on economic indicators.

Following the announcement, major stock indices, including the Dow and S&P 500, reached all-time highs.
The market anticipated a greater likelihood of further cuts in subsequent meetings, with support for potential reductions in November.

"This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained." – Jerome Powell
"We can go quicker if that's appropriate, we can go slower if that's appropriate, we can pause if that's appropriate." – Jerome Powell
"The markets got what they wanted – a big first cut by the Fed." – Chris Larkin
"I don't see anything in the economy right now that suggests that the likelihood… of a downturn – is elevated." – Jerome Powell
"If you wait until inflation gets all the way down to 2%, you've probably waited too long." – Jerome Powell

This summary contains AI-generated information and may have important inaccuracies or omissions.