Federal Reserve cuts key rate for first time this year

Core Points - The Federal Reserve has cut its key interest rate by a quarter-point, projecting two more cuts this year due to concerns about the labor market [1][5] - The current short-term rate is approximately 4.1%, down from 4.3%, marking the first cut since December [2] - The Fed's focus has shifted from inflation to job growth, as hiring has slowed and the unemployment rate has increased [3][4] Interest Rate Decisions - Fed officials, led by Chair Jerome Powell, have maintained a cautious approach, evaluating the impact of various policies on the economy before making cuts [2][6] - The committee is divided on the number of future cuts, indicating that the projected cuts should be viewed as probabilities rather than certainties [6] - Powell noted that there was not much support for a larger half-point cut among Fed officials, with only one dissenting vote from Stephen Miran [7] Market Reactions - Following the announcement, the S&P 500 index fell by 0.1%, while the Dow Jones industrial average increased by 0.5% [7] - The meeting's outcome suggests a degree of unity among Fed officials, despite differing opinions on the extent of rate cuts [8]