"The U.S. Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring even as inflation stays elevated. "Job gains have slowed this year, and the unemployment rate has edged up but remained low through August," the Fed said in a statement issued Wednesday. "More recent indicators are consistent with these developments.""
"The government hasn't issued unemployment data after August because of a federal shutdown that began on Oct. 1. The Fed is watching private-sector figures instead. The move comes amid a fraught time for the central bank, with hiring sluggish and yet inflation stuck above the Fed's two per cent target. The Fed has signaled it may reduce its key rate again in December but the data drought raises the uncertainty around its next moves."
"Wednesday's decision brings the Fed's key rate down to about 3.9 per cent, from about 4.1 per cent. The central bank had cranked its rate to roughly 5.3 per cent in 2023 and 2024 to combat the biggest inflation spike in four decades. Lower rates could, over time, reduce borrowing costs for mortgages, auto loans, and credit cards, as well as for business loans."
The Federal Reserve cut its key interest rate to about 3.9 percent, its second cut this year, down from about 4.1 percent. Job gains have slowed and the unemployment rate edged up but remained low through August, with no government unemployment updates after August due to a federal shutdown starting Oct. 1, so the Fed is using private-sector figures. The central bank previously raised rates to roughly 5.3 percent in 2023–24 to fight a large inflation spike. Lower rates could gradually reduce borrowing costs for mortgages, autos, credit cards and business loans. The Fed faces conflicting goals: support hiring while restraining inflation.
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