The Federal Reserve on Wednesday cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation but also made borrowing painfully expensive for American consumers.

The Fed's decision will lower borrowing costs from a 23-year high as the central bank pivots to shoring up economic growth.

The federal funds rate is the interest banks charge each other for overnight loans. Set by the Federal Reserve, it's a basis for other interest rates.

President Joe Biden is celebrating the Federal Reserve’s decision to lower interest rates by saying it shows that inflation has eased.

Their latest update, published on September 18th, revealed that their views on long-term interest rates are the most dispersed since the Fed started publishing these “dot plot” projections in 2012. Of the 19 officials who made forecasts (the committee’s 12 voters plus seven regional Fed presidents),

Some forecasters expect the Fed to cut interest rates by a quarter-point Wednesday. Most, however, expect a half-point reduction. The CME FedWatch forecast tracker favored a half-point cut by a 55-45 margin at midday. (Earlier Wednesday, forecasters rated the probability of a half-point reduction even higher.)

Federal Reserve Chair Jerome Powell said the economy was in solid shape. “We intend to use our tools to keep it there,” he added.

Federal Reserve Chair Jerome Powell said the central bank will lower interest rates “over time,” while again emphasizing that the overall US economy remains on solid footing.

Federal Reserve Chair Jerome Powell said Monday that the recent half percentage point interest rate cut shouldn’t be interpreted as a sign that future moves will be as aggressive, in fact indicating the next moves will be smaller.

During comments before the National Association for Business Economics in Nashville, Tennessee, Powell characterized the economy and hiring as healthy while noting that the Fed is