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The Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring even as inflation stays elevated. “Job gains have slowed this year, and the unemployment rate has edged up but remained low through August,” the Fed said in a statement. “More recent indicators are consistent with these developments.” The government hasn’t issued unemployment data after August because of the shutdown. The Fed is watching private-sector figures instead. Fed chair Jerome Powell will speak at a press conference at 5.30am AEDT. Wednesday’s decision brings the Fed’s key rate down to about 3.9 per cent, from about 4.1 per cent. The central bank had cranked its rate to roughly 5.3 per cent in 2023 and 2024 to combat the biggest inflation spike in four decades. Lower rates could, over time, reduce borrowing costs for mortgages, auto loans, and credit cards, as well as for business loans.
