US Federal Reserve cuts interest rate for first time in over 4 years

The US Federal Reserve slashed the targeted range of the benchmark interest rate, for the first time since March 2020, by 0.5 percent to 4.75 to 5 percent, prodded by the inflation's progress towards the two-percent goal. "In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent," the Federal Open Market Committee (FOMC), the Federal Reserve committee in charge of policy setting, said in a statement on Wednesday. It pointed out that recent indicators suggest that economic activity has continued to expand at a solid pace. "Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee's 2 percent objective but remains somewhat elevated," the FOMC said. The Committee stressed that it also seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. "The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance," added that the statement. "The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate." In considering additional adjustments to the target range for the federal funds rate, the Committee said it will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee affirmed that it will continue reducing its holdings of Treasury securities and agency debt and agency mortgage?backed securities. "The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective," the FOMC emphasized. Source: Kuwait News Agency