WASHINGTON, D.C. (NBC) – The Federal Reserve made its first rate cut in more than a decade on Wednesday, lowering its benchmark rate by a quarter-point.
The target range for its overnight lending rate is now down 25 basis points to 2% to 2.25%.
The committee called the current state of growth “moderate” and the labor market “strong,” but decided to loosen policy anyway.
The rate is tied to most forms of consumer debt and is likely to almost immediately have an impact on lowering credit costs.
“It is intended to ensure against downside risks from weak global growth and trade policy uncertainty, to help offset the effects these factors are currently having on the economy, and to promote a faster return of inflation to our symmetric two-percent objective,” Federal Reserve Chairman Jerome Powell said. “All of these objectives will support achievement of our overarching goal, to sustain expansion with a strong job market and inflation close to our objective for the benefit of the American people.”
The Fed also left the door open to future cuts, saying it will “act as appropriate to sustain the expansion” as it continues to evaluate incoming data.