On September 19, according to CCTV News, the US Federal Reserve announced on the 18th local time that it would lower the target range of the federal funds rate by 50 basis points to a level between 4.75% and 5.00%. This is also the first interest rate cut by the Federal Reserve in four years.

In addition, according to the Fed's forecast, the U.S. federal funds rate will reach 4.4% at the end of this year, that is, the target range of 4.25% to 4.5%, and will fall to 3.4% by 2025 and is expected to fall to 2.9% by 2026.

Analysts believe that historically, unless there is a major economic crisis, the Fed rarely cuts interest rates by 50 basis points when starting a new rate cut cycle. The Fed's rate cut, which is higher than expected by institutions, may be to achieve a "soft landing" for the economy and hedge the risk of a "stalling" in economic activity.

According to data released by the U.S. Department of Labor on the 11th, the U.S. Consumer Price Index (CPI) rose 2.5% year-on-year in August, 0.4 percentage points narrower than in July. This is the smallest increase since February 2021, showing signs of continued slowdown in inflation.

At the same time, the U.S. labor market continued to weaken. According to the Labor Department, layoffs in the United States increased to 1.76 million in July, the highest level since March 2023.

The Federal Reserve has raised interest rates 11 times from March 2022 to July 2023, with a cumulative increase of 525 basis points. Over the past year, the Federal Reserve has maintained the target range for the federal funds rate between 5.25% and 5.5%, the highest level in 23 years.

As a result, Bitcoin broke through $62,000, up 2.81% in 24 hours, and Ethereum broke through $2,400, up 3.58% in 24 hours.

Former US President Trump said that the Fed's 50 basis point rate cut showed that "if they are not just playing politics, then the economic situation is very bad to cut so much." "This is a big rate cut." Earlier, US Vice President Harris said that the Fed's decision is good news for Americans.

Full text of the interest rate cut decision:

Recent indicators suggest that economic activity continues to expand at a solid pace. Although job growth has slowed and the unemployment rate has increased slightly, it remains low. Inflation has moved further toward the Committee's 2 percent objective but remains slightly above target.

The Committee's objectives are to achieve maximum employment and 2 percent inflation over the longer run. The Committee is confident that inflation will continue to move toward its 2 percent objective and views the risks to achieving its employment and inflation objectives as roughly balanced. Given the uncertainty surrounding the economic outlook, the Committee is highly concerned about the risks to both sides of its dual mandate.

In light of the progress of inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 50 basis points to 4.75% to 5%. In considering further adjustments to the target range for the interest rate, the Committee will carefully assess recent data, changes in the economic outlook, and the balance of risks. The Committee will continue to reduce its holdings of Treasury bonds, agency debt, and agency mortgage-backed securities. The Committee is firmly committed to supporting maximum employment and returning inflation to its 2% objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the Committee's achievement of its goals. The Committee's assessments will take into account a variety of information, including labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

The committee members who supported the monetary policy action included: Chairman Jerome Powell, Vice Chairman John C. Williams, Thomas I. Barkin, Michael S. Barr, Raphael W. Bostic, Lisa D. Cook, Mary C. Daly, Beth M. Hammack, Philip N. Jefferson, Adrienne D. Kugler and Christopher J. Waller. The committee member who opposed the decision was Michelle W. Bowman, who preferred to lower the federal funds rate target range by 25 basis points at this meeting.