Overview

• The Federal Reserve has reduced its benchmark interest rate, marking the first cut since the pandemic's early days.
• The rate cut is expected to lower borrowing costs for mortgages, auto loans, and credit cards, providing relief to households and businesses.
• Fed officials are divided between a quarter-point and a half-point reduction, with markets favoring a larger cut.
• The decision comes as inflation has significantly cooled, with the Consumer Price Index dropping to 2.5% from a mid-2022 peak of over 9%.
• The move is politically significant, potentially boosting Vice President Kamala Harris's campaign while drawing criticism from former President Donald Trump.