WASHINGTON: The US Federal Reserve cut its key lending rate by half a percentage-point Wednesday in its first reduction since the onset of the Covid-19 pandemic, sharply lowering borrowing costs shortly 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 Donald Trump.
Policymakers voted 11-to-1 in favor of lowering the US 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.
The Fed said its rate-setting committee “has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”