The Federal Reserve on Wednesday said it is cutting its benchmark interest rate by 0.50 percentage points, marking the first reduction in four years and moving to ease borrowing costs as inflation-weary consumers are grappling with high rates on everything from mortgages to credit cards.
The Fed said the cut lowers the federal funds rate into a range of 4.75% to 5%, down from its prior range of 5.25% to 5.5%, which had been its highest level in 23 years.
The half-point move signals that the Fed is acting aggressively to keep the U.S. economy from stalling, given that historically most rate cuts are 0.25 percentage points. Prior to the decision, some economists had urged the Fed to make a bolder reduction, given signs of weakness in the labor market and a cooling economy.
“This is a bit of a surprise,” Brian Coulton, chief economist at Fitch Ratings, said in an email. The …