Live updates from the US Fed meeting: THE US Federal Reserve announced its seventh policy decision for 2024 after a two-day meeting of the Federal Open Market Committee (FOMC) and reduced the benchmark interest rate by 25 basis points (bps) or (1/4) quarter percentage point to 4.50 – 4.75 percent. , broadly in line with Wall Street estimates.

At the September meeting, the US Fed reduced the benchmark interest rate by 50 basis points (bps) or (½) half a percentage point to 4.75 percent-5 percent for the first time in four years after policymakers expressed confidence that inflation was consistently on track to approach the 2 percent target.

U.S. Fed policymakers expect the benchmark interest rate to fall another half point (50 basis points) by the end of this year, another full percentage point in 2025 and more. a final reduction of half a point in 2026 to result in a drop of 2.75 percent to 3.00. percentage range. One basis point is equivalent to one hundredth (1/100) of a percentage point.

The Fed initiated an aggressive monetary tightening cycle by raising its policy rate by 5.25 percentage points since March 2022, one of the Fed’s quickest responses to growing price pressures that ultimately reached a four-decade high.

The Fed’s rate hikes helped reduce annual inflation from 9.1 percent in June 2022 to 2.5 percent. However, high rates have made borrowing more expensive for businesses and households. Economists say policymakers need to keep interest rates high enough to beat rising inflation without derailing the economy.