The Federal Reserve lowered its benchmark interest rate by a half percentage point Wednesday, in an aggressive start to a policy shift aimed at bolstering the...
FILE - A screen displays a news conference with Federal Reserve Chairman Jerome Powell on the floor at the New York Stock Exchange in New York, May 1, 2024. The Federal Open Market Committee voted 11 to 1 to lower the federal funds rate to a range of 4.75% to 5%, after holding it for more than a year at its highest level in two decades.
Investors, who were leaning toward a big cut earlier Wednesday, will listen for additional guidance on what prompted the quick start when Fed Chair Jerome Powell holds a press conference at 2:30 p.m. in Washington.Governor Michelle Bowman dissented in favor of a smaller, quarter-point cut, the first dissent by a governor since 2005, and the first dissent from any member of the FOMC since 2022.
The median forecast for inflation at the end of 2024 declined to 2.3%, while the median projection for economic growth ticked down to 2%. Policymakers still don’t see inflation returning to their 2% target until 2026.Wednesday’s decision begins a new chapter for the Fed, which started lifting borrowing costs in early 2022 to curb a pandemic-driven surge in prices.
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