For the first time since Corona:

US Federal Reserve lowers key interest rate by 0.5 percentage points

Fed cuts key interest rates: Some traders had speculated on such a big move, while many economists had expected a smaller step.

(Bild: AP)

The US Federal Reserve (Fed) is responding to the slowdown in inflation by lowering its key interest rate for the first time since the outbreak of the coronavirus pandemic. The Fed has announced that the key interest rate will now be reduced by 0.5 percentage points to a corridor of 4.75 to 5.00 percent.

The Fed had previously left its interest rate unchanged for 14 months in a row. Most bank economists had only expected a rate cut of 0.25 percentage points. However, expectations had recently risen on the financial markets that interest rates could also be cut by 0.5 points. 

The range was last raised by 0.25 percentage points in July 2023. The Fed had raised interest rates sharply in the fight against inflation. At the beginning of March 2022, the interest rate range was still between zero and 0.25 percent.

The inflation rate had fallen to 2.5 percent in August. In 2022, this had still amounted to a good 9 percent at times. However, the rate is currently still above the Fed's inflation target of two percent.