The US Federal Reserve cut its key policy rate for the first time this year – the main threat is no longer inflation

For the first time this year, the US Federal Reserve cut its key interest rate by 0.25 percentage points – from 4.25% to 4%. About writes Financial Times.

The decision coincided with Wall Street expectations and signals further policy easing amid a weakening labor market.

In the Fed's new forecasts, most policymakers said that at least two more similar rate cuts are possible before the end of the year. This indicates a shift in emphasis – now the main threat is seen as a drop in employment, not inflation.

"The labor market has weakened. The likelihood of a prolonged outbreak of inflation has decreased"fed Chairman Jerome Powell said, calling the decision a "risk-management cut."

According to the latest reports, only 22,000 new jobs were created in the US in August. In addition, the Bureau of Labor Statistics lowered its estimate of employment growth for the year to March 2025 by 911,000, confirming a large-scale slowdown in hiring.

Despite the tariffs introduced by the Donald Trump inflation is growing moderately – up to 2.9% in August against 2.7% in July. This allows the Fed to focus more on supporting the economy.

The decision was supported by 11 of the 12 committee members. Only the newly appointed Stephen Miran, an ally of Trump, was in favor of a larger cut – by 0.5 percentage points at once.

• June 5, European Central Bank lowered the discount rate for the eighth time in a year.