The Federal Reserve cut interest rates on Wednesday for the first time since March 2020, lowering the Fed funds rate by 50 basis points as it declared the fight against inflation all but won.
The decision to go with a larger 50 basis point rate cut, instead of the more common 25 basis point option, comes amid a significant cooling in the labor market as well as calls for a larger rate cut from economists, politicians, and former Fed officials who fear the economy is beginning to show signs of strain. "Staying at or near the current funds rate raises the chance of an economic slowdown or recession significantly,” Jeremy Siegel, a Wharton professor and veteran Fed watcher, warned in a Fortune op-ed Tuesday.
