The US Federal Reserve has lowered its benchmark interest rate by 0.25 percentage points – its first cut since December last year – as the United States grapples with a stalling labour market and slower economic growth. The Fed cut reduces the federal funds rate – what banks charge each other for short-term loans – to between 4% and 4.25%, down from its prior range of 4.25% to 4.5%. 

The Fed said in a statement that job gains have slowed, and the unemployment rate has edged up but remains low. It also said inflation has moved up and remains somewhat elevated. New Fed Governor Stephen Miran dissented, saying he preferred a half-percentage-point cut.

It was the first meeting to include Miran, President Donald Trump’s pick to fill a vacancy on the Federal Reserve Board of Governors. He was narrowly confirmed on September 15. Fed Governor Lisa Cook also participated in the meeting after an appeals court gave her permission to continue her duties as she battles Trump’s move to fire her.

Meanwhile, US stocks hit a record high in choppy trading with equities on Wall Street ending mixed after the Federal Reserve delivered a widely expected interest rate cut and signalled the start of a monetary policy easing cycle.