US Fed slashes rates by 50 basis points in first easing since pandemic hit

Federal Reserve Chair Jerome Powell announced a significant cut in interest rates by half a percentage point, signaling a steady easing of monetary policy in response to concerns about the job market. This decision will impact borrowing costs for consumers and businesses. The move is likely to benefit Democratic candidate Kamala Harris, who has been highlighting President Joe Biden’s economic record in her campaign against Donald Trump. The Fed’s decision was not unanimous, with one member supporting a smaller rate cut. The decision was influenced by the Fed’s confidence in inflation moving towards 2% and balancing employment and inflation goals. The larger-than-expected rate cut surprised some analysts, who were uncertain about the size of the move. The decision is expected to have political ramifications, as inflation and cost of living are key concerns for American voters. Trump has criticized the Fed’s decisions in the past, accusing them of being politically motivated, which the Fed has denied.