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on wednesday local time, the federal reserve announced that it would cut its benchmark interest rate by 50 basis points to 4.75% to 5.00%.

the committee members voted 11-1 to approve the interest rate decision.this is the first interest rate cut since march 2020 and a clear sign that monetary policy is shifting from tightening to easing.

the decision to cut interest rates reflects the federal reserve's assessment of the current economic situation, especially its considerations on inflation and the job market.

a substantial 50 basis point rate cut

the fed believes that inflation has made further progress toward its 2% target, and although it is still a bit high, the outlook has improved. at the same time, job growth has slowed and the unemployment rate has risen, although it remains low.

therefore, the federal reserve believes that the risks to achieving the two major goals of full employment and price stability are roughly balanced.

in addition, the federal reserve will continue to reduce its holdings of u.s. treasury securities, agency debt, and agency mortgage-backed securities. the committee remains firmly committed to supporting maximum employment and returning inflation to its 2 percent objective.