By Mucahithan Avcioglu
ISTANBUL (AA) - The US Federal Reserve slashed its benchmark federal funds rate by 25 basis points Wednesday between the 4% - 4.25% target range, as widely expected.
This marked the first rate cut this year, as the bank had held the rate unchanged in the five previous meetings.
The Fed stated that recent data showed that the growth of economic activity moderated in the first half of the year.
"Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated," the central bank said.
It said the Federal Open Market Committee (FOMC) seeks to achieve maximum employment and inflation at the rate of 2% in the longer run.
"The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen," it said.
The Fed said in considering the extent and timing of additional adjustments to the target range for the policy, the FOMC will "carefully" assess incoming data, the evolving outlook and the balance of risks.
"The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities," it added.
The decision to lower the rate by 25 basis points was supported by 11 of 12 governors, while newly sworn-in Stephen Miran supported a 50 basis point rate cut.
The central bank had kept the rate at the historically high level of 5.5% from July 2023 to September 2024, before gradually lowering it to 4.5% in its December meeting.