The Federal Reserve said Wednesday it was lowering its key interest rate by half a percentage point, an unusually aggressive move designed to cushion the economy from a further slowdown.
In announcing the rate cut, the central bank noted job gains had slowed, while inflation had made further progress toward its 2% goal.
In a follow-up press conference, Fed Chair Jay Powell said the labor market and the economy in general remain in “solid shape.”
But by making the larger cut, he said, “our intention is to keep it there.”
While the surging inflation that has bedeviled the U.S. economy since the start of the Covid-19 pandemic has largely cooled down, it is not yet at the Fed’s 2% goal, Powell noted.
Yet the risk of price growth reigniting from lower interest rates was minimal, he said.
“We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation,” Powell said. “That’s what we’re trying to do, and I think you could take today’s action as a sign of our strong commitment to achieve that goal.”
The central bank’s decision has already come in for comment by GOP vice presidential nominee J.D. Vance. At a rally in North Carolina, Vance blamed Vice President Kamala Harris, the Democratic presidential nominee, for enacting policies that required rates to go higher in the first place.
Mortgage interest rates, he said, “have gone up [to] about 6% thanks to Kamala Harris’…
