The US Federal Reserve has cut interest rates for the first time in more than a decade in an indication that the world’s largest economy is running out of steam.
The US central bank cut its key benchmark interest rate by a quarter of a percentage point, to a range of 2%-2.25%, in the first reduction in borrowing costs since immediately after the financial crisis a decade ago.
Rates remain less than half the 5.25% level before the 2008 crash, when the Fed was last forced into cutting rates.
The move comes after Donald Trump has applied significant pressure on the central bank to lower rates in order to stimulate economic growth. The president had called the Fed an “anchor wrapped around our neck” and blamed rate rises last year for an unspectacular growth rate in the US.
However, economists had been expecting the central bank to lower its headline rate as economic growth slows. Rising trade tensions between the US and China have served as a brake on international trade.
More to follow …
