The Federal Reserve announced on the 18th that it will lower the target range for the federal funds rate by 50 basis points, to a level between 4.75% and 5.00%. This is the first interest rate cut by the Federal Reserve since March 2020, and also marks a shift from a tightening cycle of monetary policy to an easing cycle. The Federal Reserve ended its two-day monetary policy meeting on the same day. The Federal Open Market Committee, the decision-making body of the Federal Reserve, issued a statement after the meeting on the 18th, stating that the committee has "greater confidence" in the sustainability of inflation towards the 2% target and believes that the risks of achieving full employment and price stability are roughly balanced. At a press conference held after the meeting, Federal Reserve Chairman Powell called the 50 basis point rate cut a "strong action," while also stating that the Federal Open Market Committee does not believe the rate cut is slow, but rather sees it as a timely measure. Powell pointed out that the personal consumption expenditure price index has dropped from a high of around 7% to 2.2% in August, indicating that inflation has "significantly eased". The latest economic outlook released by the Federal Reserve on the same day showed that the median forecast for the personal consumption expenditure price index by Federal Reserve officials at the end of this year has dropped to 2.3%, lower than the 2.6% in June. At the same time as inflation is declining, there are some signs of weakness in the US job market. Powell stated that the average monthly employment growth over the past three months was 116000, which is significantly lower than the level earlier this year. Meanwhile, the unemployment rate has risen to 4.2%. According to the latest economic outlook expectations, Federal Reserve officials have a median forecast for the unemployment rate at the end of this year of 4.4%, higher than June's 4.0%, which means that the labor market situation is not as good as previously expected. In addition, the economic outlook also shows that the 19 members of the Federal Open Market Committee expect the Fed to further cut interest rates before the end of this year, with 9 expected to cut rates by 50 basis points and 7 expected to cut rates by 25 basis points. Due to the slower than expected decline in inflation, the Federal Reserve has maintained its target range for the federal funds rate between 5.25% and 5.5% since the end of July last year, the highest level in 23 years. In recent months, with the further easing of inflation in the United States and signs of weakness in the job market, the Federal Reserve has faced pressure to shift its policies. (New Society)