The U.S. Federal Reserve (the central bank) announced today, Wednesday, a reduction in interest rates by 25 basis points, bringing the rate to a range of 4.00% to 4.25%, marking the first rate cut of the year.
The Fed stated in a press release that the decision comes in light of a slowing labor market and the risks facing the U.S. economy, noting the possibility of two additional rate cuts before the end of the year.
A majority of the Fed's members voted in favor of the decision.
The Fed also indicated expectations for further cuts: 50 basis points by the end of the year, and an additional 25 basis points each in the next two years.
This decision is expected to impact major banks worldwide and the stock prices of companies on global markets.