The Federal Reserve reduced the target for its key lending rate by 0.5 percentage points, to the range of 4.75%-5%.
Wednesday’s cut was larger than many analysts had predicted just a week ago, and the bank’s forecast signalled that rates could fall another half percentage point by the end of the year.
Federal Reserve chair Jerome Powell said the aggressive action on Wednesday was intended to make sure that high borrowing costs, put in place to fight inflation, would not end up hurting the US economy.
“The labour market is in a strong place - we want to keep it there,” Mr Powell said. “That’s what we’re doing.”
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