The US Fed has lowered the key rate for the first time: what this means for the global economy.

The Federal Reserve System of the United States has lowered the target range for the federal funds rate

According to inkorr.com: Yesterday, the Federal Reserve System of the United States has reduced the target range for the federal funds rate for the first time, now it stands at 4-4.25%, which is 0.25% lower than before.

The Federal Open Market Committee explained this decision by stating that economic activity in the first six months of the year has slowed down, which negatively impacted the labor market and the unemployment rate. However, inflation remains moderately high.

'Uncertainty regarding the economic outlook remains elevated. The Committee is closely monitoring risks to both sides of its dual mandate and believes that risks to employment have increased'

The Fed is focusing on achieving maximum employment and stable 2% inflation in the long term, as the increasing risks to employment have become the main reason for lowering the rate.

At the meeting, 11 members of the committee supported the rate cut, except for Stephen Miran, who advocated for an even larger cut of 0.5%.

The Federal Reserve elicited a positive reaction in the market by lowering the rate due to the slowdown in economic activity and rising risks to employment. This move may help support the economy in uncertain times and stimulate employment.

Lowering the federal funds rate can be an important step in supporting economic stability. Its consequences may affect lending and investment, which, in turn, may positively impact economic growth and the labor market in the near future. Observers in the financial markets will closely monitor the developments and future decisions of the Fed.