The United States has implemented a substantial interest rate cut for the first time in four years.
It’s important to note that earlier this year, the U.S. unemployment rate increased from 3.7% to 4.2%.
Projections released after the Federal Reserve’s meeting show that officials now anticipate a sharp decline in inflation. Compared to June, unemployment has risen, and the unemployment rate in the U.S. is expected to reach 4.4% by the end of 2024.
Recent data from the Department of Commerce indicates that the U.S. economy grew at an annual rate of 3% during the three months following June this year, while inflation dropped to 2.5% in August.
Historically, the Fed has announced a 0.5 percentage point interest rate cut during crises like the onset of the COVID-19 pandemic or the 2008 financial crash.
The report also states that the Federal Reserve has maintained steady interest rates since July 2023.
Fed officials are now predicting that interest rates will drop to approximately 4.4% by the end of this year and 3.4% by the close of 2025.
