#TheFed cuts interest rates for the first time in 4 years#TheFed cuts the benchmark interest rate by 50 basis points#] On the 18th local time, the Federal Reserve ended its two-day monetary policy meeting and announced that it would lower the target range of the federal funds rate to 4.75% to 5%, that is, a 50 basis point cut. This is the first interest rate cut by the Federal Reserve since 2020. Analysts believe that historically, unless encountering a major economic crisis, the Federal Reserve rarely cuts interest rates by 50 basis points when starting a new interest rate cut cycle. The Federal Reserve cut interest rates with a force higher than expected by institutions this time, which may be to achieve a "soft landing" of the economy and hedge the risk of "stall" in economic activity.

Recent data show that the U.S. Consumer Price Index (CPI) rose 2.5% year-on-year in August, falling to a new low since February 2021, close to the Fed's 2% inflation target. But at the same time, the growth of personal consumption expenditures, an important driving force for U.S. economic growth, is slowing down, and manufacturing activities have been in the shrinking range for many consecutive months. The labor market has also continued to be weak, and the number of new jobs in the private and non-agricultural sectors has dropped sharply month by month. The above factors have caused some investors to worry that the U.S. economy is approaching a recession.

Previously, the Fed raised interest rates 11 times in a row from March 2022 to July 2023, with a cumulative increase of 525 basis points. Over the past year, the Fed has maintained the target range of the federal funds rate between 5.25% and 5.5%, the highest level in 23 years.