- Bagnaia eyeing summit on home ground in 100th MotoGP
- 'Something was wrong', defendant in French mass rape tells court
- Hezbollah chief admits 'unprecedented' blow in device blasts
- Sales of US existing homes slip slightly in August
- Fear, panic haunt Lebanese after devices explode
- Labuschagne sparks Australia fightback in England ODI opener
- S.Africa's HIV research power couple says fight goes on
- Why is Israel focusing on border with Lebanon?
- Mpox vaccines administered in Rwanda, first in Africa
- US Fed rate cut is 'very positive sign' for economy: Yellen
- Unknown Mozart string trio discovered in Germany
- 'Are we five-year-olds?' F1 drivers won't mind their language
- Brazil judge orders X to reimpose block or face hefty fine
- Munich to rename stadium street after Beckenbauer
- Champions Italy to face Argentina in Davis Cup Final 8
- The winding, fitful path to weight loss drug Ozempic
- Italians defeat American Magic to reach Louis Vuitton Cup final
- Norris has 'nothing to lose' as he hunts Verstappen in Singapore
- Kyiv 'outraged' at Swiss showing of Russian war film
- French city renames Abbe Pierre square after abuse claims
- Footballer charged after huge cannabis seizure at UK airport
- Vatican recognises Medjugorje shrine, but not Virgin's messages
- Bank of England freezes rate after jumbo US cut
- Playing Nadal is 'kind of a nightmare', says Alcaraz
- Portugal tackles last of deadly northern forest fires
- Ton-up Ashwin lifts India to 339-6 against Bangladesh
- Departing NATO chief warns US against 'isolationism'
- Coming winter 'sternest test yet' for Ukraine energy grid
- Evacuations as tail of Storm Boris floods northeast Italy
- Lebanon's Hezbollah reeling after second wave of deadly blasts
- Taiwan recognises same-sex marriages between Chinese, Taiwanese
- Stock markets rally after jumbo US rate cut
- Gabon's ousted leader Bongo says renouncing politics for good
- Lebanon device blasts: what we know about deadly attacks
- Late Harrods owner Al-Fayed accused of rape: BBC
- Hong Kong man sentenced 14 months for wearing 'seditious' T-shirt
- Lebanon's Hezbollah in disarray after second wave of deadly blasts
- Meta and Spotify blast EU decisions on AI
- Hasan takes three as Bangladesh rattle India in first Test
- Two killed during police operation in New Caledonia
- Flood-hit region leaders to meet in Poland to discuss EU aid
- Sri Lanka to vote in first poll since economic collapse
- Hong Kong probe finds Cathay Airbus defect could cause 'extensive' damage
- AI development cannot be left to market whim, UN experts warn
- All Blacks primed for 'hell' of a Wallabies clash
- Zoom fatigue? Try some nature in your background: study
- Japan walkie-talkie maker says investigating after Lebanon blasts
- Slipper to become most-capped Wallaby in All Blacks clash
- Tokyo surges on weak yen as Asian traders cheer big US rate cut
- Vast France building project sunk by sea level rise fears
RBGPF | 5.79% | 60.5 | $ | |
RYCEF | 5.48% | 6.93 | $ | |
CMSC | -0.14% | 25.02 | $ | |
AZN | 0.86% | 79.265 | $ | |
GSK | -1.05% | 41.99 | $ | |
NGG | -1.77% | 68.83 | $ | |
RIO | 3.53% | 65.215 | $ | |
BTI | -0.68% | 37.625 | $ | |
SCS | -7.1% | 13.175 | $ | |
CMSD | 0.1% | 25.005 | $ | |
BCC | 3.96% | 142.71 | $ | |
RELX | 1.48% | 48.08 | $ | |
BCE | -0.55% | 35.415 | $ | |
VOD | -1.64% | 10.065 | $ | |
JRI | -0.07% | 13.43 | $ | |
BP | 1.8% | 33.025 | $ |
US Fed makes aggressive rate cut, weeks before election
The US Federal Reserve cut its key lending rate by half a percentage-point Wednesday in its first reduction since the Covid-19 pandemic, sharply lowering borrowing costs just before November's presidential election.
The Fed's decision will affect the rates at which commercial banks lend to consumers and businesses, bringing down the cost of borrowing on everything from mortgages to credit cards.
The news will likely be well-received by Democratic candidate Kamala Harris, who has looked to highlight President Joe Biden's economic record in her race against Republican Donald Trump.
Policymakers voted 11-to-1 in favor of lowering the central bank's benchmark rate to between 4.75 percent and 5.00 percent, the Fed announced in a statement.
The key holdout was Fed governor Michelle Bowman, who supported a more conventional quarter-point cut.
"It is time to recalibrate our policy to something that is more appropriate given the progress on inflation, and on employment moving to a more sustainable level," Fed Chair Powell told reporters after the decision was announced.
"This is the beginning of that process," he added.
- Fed 'gained greater confidence' -
The Fed said its rate-setting committee "has gained greater confidence" that inflation was moving toward its long-term two percent target.
It added that "the risks to achieving its employment and inflation goals are roughly in balance."
The bank has a dual mandate from Congress to act independently to tackle both inflation and employment.
Analysts were expecting the Fed to cut rates on Wednesday, as inflation eases, and the labor market continues to cool in the surprisingly resilient post-Covid economy.
But they were highly uncertain about the size of the move, with some anticipating a quarter of a percentage point, and others predicting the more significant half-point cut, which carries a greater risk of reigniting inflation.
In updated forecasts published alongside the Fed's rate decision, policymakers' median forecasts pointed to an unemployment rate of 4.4 percent, on average, in the fourth quarter of this year, up from 4.0 percent in the last update in June.
They also penciled in an annual headline inflation rate of 2.3 percent, slightly lower than in June.
The decision to cut more sharply to begin with caught some analysts by surprise.
"In our base case the Fed cuts 25bp (basis points) but signals 100bp of cuts this year with the median 2024 'dot'", economists at Citi wrote in an investor note published ahead of the rate decision.
- Election stakes -
The Fed's mandate gives it the independence to set monetary policy solely on the basis of economic data.
But its decision will have political ramifications, given the importance of inflation and the cost of living to US consumers.
Americans have consistently said both are top concerns ahead of the election.
Trump has repeatedly criticized Powell, who he first appointed to run the Fed, and has suggested that its decisions are political -- accusations the US central bank has strongly refuted.
T.Resende--PC