Why the US is cutting interest rates

The Federal Reserve makes its first cut to interest rates since 2024, and signals more to come.

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After months of economic debate and mounting attacks from US President Donald Trump, the US central bank cut interest rates on Wednesday.

The Federal Reserve said it was lowering the target for its key lending rate by 0.25 percentage points. That will put it in a range of 4% to 4.25% - the lowest level since late 2022.

The move - the bank's first rate cut since last December - is expected to kick off a series of additional reductions in the months ahead, which should help bring down borrowing costs across the US.

But today's move carries a warning about the economy, reflecting increased consensus at the Fed that a stalling job market needs a boost in the form of lower interest rates.