The move follows months of pressure from the White House for cheaper borrowing costs.
Fed officials said the decision was aimed at shoring up a softening job market, though Trump has repeatedly demanded cuts to accelerate the economy.
The reduction ends a nine-month pause during which the Fed held rates steady while assessing the impact of Trump’s tariffs and policy shifts. The White House has been pressuring the central bank for months to bring down borrowing costs, with Trump arguing cuts are needed to speed up growth.
A rate cut had been widely expected on Wall Street. Fed Chair Jerome Powell signaled at the central bank’s Jackson Hole symposium that the outlook had shifted, with risks in the labor market now outweighing inflation concerns. “The time has come for policy to adjust,” Powell said.
The central bank also indicated that it expects to deliver two additional cuts later this year if current trends continue. Markets rallied following Wednesday’s decision.
This is a breaking news story. Refresh for updates.
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