The Federal Reserve announced its first rate cut of the year, bringing its key interest rate down to a range of 4% to 4.25%.

After nine months of staying on the sidelines, the Federal Reserve on Sept. 17 announced a quarter-percentage-point cut, likely the first in a series of reductions to usher in lower borrowing rates for consumers.

The rate cut – the Fed’s first since late 2024 – lowers the Fed’s benchmark interest rate to a range of 4% to 4.25%. Officials signaled the possibility of two more rate cuts this year.

Typically, the Fed hikes rates or keeps them steady to tame inflation. The central bank lowers rates to juice the economy. While the Fed previously held back on rate cuts due to inflation concerns, a series of disappointing jobs reports showed a weakening labor market.

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