Federal Reserve cuts key interest rate for the second time this year

The Federal Reserve on Wednesday cut its benchmark interest rate for the second time this year as it seeks to boost economic activity and rejuvenate the sluggish labor market despite concerns about persistent inflation

The Federal Reserve on Wednesday cut its benchmark interest rate for the second time this year as it seeks to boost economic activity and rejuvenate the sluggish labor market despite concerns about persistent inflation.

But far from having a clear way forward, disagreements within the Fed's policy-setting committee and warnings from Chair Jerome Powell highlight the complicated challenges that the U.S. central bank faces from an economy that offers little certainty.

"What do you do if you’re driving in the fog?" Powell asked at a press conference following the Fed's announcement. "You slow down."

The Fed's cut of a quarter of 1% from the bank's benchmark interest rate could bring financial relief to consumers and businesses in the form of lower borrowing costs. But it also carries risks as inflation ticks up.

In its statement accompanying the rate cut announcement, the central bank said that although economic activity has been expanding, jobs growth has slowed while inflation has increased.