The US Federal Reserve has lowered the key rate for the first time since December: what does it mean

The US Federal Reserve has lowered the target range for the federal funds rate

Yesterday, the US Federal Reserve lowered the target range for the federal funds rate for the first time, which now stands at 4-4.25%, down 0.25% from before.

The Federal Open Market Committee explained this decision by stating that economic activity slowed in the first half of the year, which affected the labor market and the rate of unemployment. At the same time, inflation remains at a moderately high level.

'Uncertainty regarding economic prospects remains heightened. The Committee is closely monitoring risks to both sides of its dual mandate and believes that the risks to employment have increased'

The Fed is focusing on achieving maximum employment and stable 2% inflation in the long term, as the rising risks to employment are the main reason for lowering the rate.

At the meeting, 11 committee members voted for the rate cut, except for Stephen Miran, who supported an even more significant reduction of 0.5%.

The Federal Reserve has pleased the market by reducing the rate in light of the slowing economic activity and increasing risks to employment. This step may help support the economy amid uncertainty and stimulate employment for the population.