Federal Reserve cuts rates by 50bps amid growing confidence in economy

Largest cut in four years

The US Federal Reserve has cut its current federal funds rate by 50 basis points, bringing it down to a range of 4.75%-5%.

The Fed's move comes on the back of growing confidence in US economic data and after annual inflation dropped to 2.5% in August, beating market expectations. Eleven members of the Federal Open Market Committee (FOMC) voted in favour of the 0.5 percentage point cut, with one member, Michelle Bowman, opting instead for a quarter-point reduction. The cut was also the largest taken by Fed policymakers since 2020, when the Covid-19 pandemic struck. Fed rate cut a 'near certainty' as US inflation drops to 2.5% beating expectations In his speech on Wednesday (18 September), Fed chair J...