Federal Reserve cuts key rate by sizable half-point

The Federal Reserve has cut its benchmark interest rate by half a point, signaling a shift in its approach after years of high rates aimed at controlling inflation. The rate drop to about 4.8% comes as the Fed focuses on supporting a slowing job market, just weeks before the presidential election.

Inflation has decreased from a peak of 9.1% in mid-2022 to 2.5% as of August. The Fed is suggesting further rate cuts in upcoming meetings.

In its statement, the Fed expressed "greater confidence that inflation is moving sustainably toward 2%." However, it anticipates higher unemployment rates in the near future.