Fed lowers interest rates by 25 basis points, first cut since December

The US Federal Reserve on Wednesday voted to cut interest rates by 25 basis points, its first cut since December, as the central bank turns its attention to slower economic growth and weaker employment from sticky inflation.

At the conclusion of its two-day meeting, the Federal Open Market Committee voted to lower rates to the 4.00%-4.25% range.

The sole dissent was newly appointed board member Stephen Miran, who backed a 50bp cut.

In a statement, the FOMC said recent indicators suggest the "growth of economic activity moderated in the first half of the year".

"Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated," it added.

In considering "additional adjustments to the target range for the federal funds rate," the FOMC said it will "carefully assess incoming data, the evolving outlook, and the balance of risks."

In assessing the appropriate stance of monetary policy, the committee will continue to watch incoming data regarding the economic outlook.

"The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee's goals," it added.

The Fed also said it would continue to reduce holdings of Treasury securities and agency debt and agency mortgage‑backed securities.

It remains "strongly committed to supporting maximum employment and returning inflation to its 2 percent objective."

Eyes were also on the summary of economic projections, which included the dot plot of interest rate expectations. The plot showed the median expectation is for 50 basis points more of rate cuts this year.