Fed Takes Action: Rate Cut and Balance Sheet Halt Signal Economic Shift

In a move to ease economic pressures amidst slowing growth, the Federal Reserve lowered its benchmark interest rate by 25 basis points to 3.75%–4.00%. This is the first easing since 2020. The decision, supported by Chair Jerome Powell and most FOMC members, comes after signs of job market slowdown and persistent inflation, prompting the Fed to halt its balance sheet reduction program (QT) in December.