Fed cuts interest rate for first time since Christmas

America’s Bank reduced its benchmark interest rate by a quarter percentage point on Wednesday, after a nine-month stall. The rate now sits between 4.00% and 4.25%, with more cuts expected in the coming months. The decision by the Federal Reserve’s Board of Governors came in a near-unanimous 11 to 1 vote, with Stephen Miran—a recent Trump appointee to the board who was sworn in on Tuesday—as the lone dissenter. Miran had wanted a larger half-point cut instead, according to a Wednesday statement from the bank.

What reason did the committee give for the shift? The committee pointed to several economic indicators as contributors to its decision, namely job gains slowing, inflation remaining somewhat elevated, and rising anxiety about the economic outlook. The committee said it would continue to assess incoming data, including readings on labor market conditions, inflation pressures, and international developments. The Federal Reserve is aiming for a maximum 2% inflation rate in the long run, but cutting interest rates tends to increase inflation. The annual inflation rate in the United States in August was 2.9%.

Dig deeper: Read Elizabeth Russell’s report on Federal Reserve Chair Jerome Powell hinting at the decreased rate last month.