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reporter cui puyu

reporter cui puyu

at a monetary policy meeting that ended early thursday morning beijing time, the federal reserve announced a 50 basis point cut in the benchmark federal funds rate range to 4.75%-5.0% to prevent the job market from cooling down too quickly.

this is the first rate cut by the fed in four and a half years. in march 2020, the fed slashed the federal funds rate by 100 basis points to 0-0.25% in response to the economic shutdown caused by the spread of the new coronavirus. two years later, in response to rare inflationary pressures, the fed raised interest rates 11 times in a row, with a cumulative increase of 525 basis points. since july 2023, the federal funds rate has remained at 5.25%-5.5%, the highest level since 2001.

this time, the federal open market committee (fomc) passed a resolution to cut interest rates by 50 basis points with an 11 to 1 vote. among the 12 voting members, only federal reserve board governor michelle bowman supported a 25 basis point rate cut.

the fed said in a policy statement released after the meeting that it made the above decision based on the progress made in fighting inflation and the consideration of risk balance. "the committee has increased its confidence that inflation will continue to move toward 2% and believes that the risks to the fed's employment and inflation goals are roughly balanced," the statement said.

"we believe that by appropriately adjusting the stance of policy, we can sustain the strong momentum in the labor market while achieving moderate economic growth and inflation falling to 2% on a sustained basis," fed chairman jerome powell said at a press conference after the meeting.