The U.S. Federal Reserve on Wednesday lowered its benchmark interest rate by half of a percentage point, the first cut in more than four years, in a major policy shift less than seven weeks away from the presidential election.

After the two-day Federal Open Market Committee (FOMC) meeting, the central bank announced the decision to reduce the rate to the 4.75 to 5.0 percent range from its 23-year high, as inflation fell to 2.5 percent — not far above the Fed’s 2 percent target — last month.

From March 2022 to July last year, the central bank raised the key rate 11 times under an aggressive campaign to cool inflation that hit a peak of 9.1 percent in June 2022. After the hikes, the Fed kept the rate steady for eight consecutive times.

Source: Yonhap News Agency