Inflation has fallen dramatically since peaking in summer 2022, although many consumers are still grappling with higher costs from groceries and fuel to rent and travel fares after years of price increases.
Jerome Powell, the Fed Chair, stated, 'This decision reflects our growing confidence that, within appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to the Fed's 2% target.'
The Fed's decision to lower its benchmark federal funds rate to between 4.75% and 5% marks a significant turning point in its battle against inflation.
Policymakers at the Fed also expect to cut rates by an additional 50 basis points this year, according to projections released alongside the news.
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