Federal Reserve cuts rates for the first time since the financial crisis

The Federal Reserve on Wednesday cut its benchmark interest rate by 0.25 percentage point to a range of 2.00 to 2.25 percent. It is the first reduction since 2008.

The central bank pointed to weak global growth, trade tensions and inflation running below its 2 percent target. It also said it would end the reduction of its balance sheet earlier than previously planned.

The decision was not unanimous, with two officials voting to keep rates unchanged. At the press conference, Chair Jerome Powell described the move as an adjustment in the middle of a cycle, a framing that disappointed some investors who had hoped for a clear signal of further cuts. Stocks fell and the dollar strengthened during the afternoon.

The cut comes amid open pressure from the White House, where President Trump has repeatedly criticised the Fed for keeping rates too high. The Fed maintains that its decisions are based on economic data, but the public pressure has fuelled debate about central bank independence.

For borrowers, the change means slightly cheaper credit. For savers, returns on cash will slip. For markets, the next question is whether this is an insurance cut or the start of a longer series, a debate likely to be shaped by the US and China trade negotiations.