Fed reduces key interest rate by a quarter-point Fed reduces key interest rate by a quarter-point

WASHINGTON - The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that angered Americans and helped drive Donald Trump's presidential election victory this week.

The rate cut follows a larger half-point reduction in September, and it reflects the Fed's renewed focus on supporting the job market as well as fighting inflation, which now barely exceeds the central bank's 2% target.

Thursday's move reduces the Fed's benchmark rate to about 4.6%, down from a four-decade high of 5.3%. The Fed kept its rate that high for more than a year to fight the worst inflation streak in four decades on the heels of the COVID-19 pandemic. Annual inflation since fell from a 9.1% peak in mid-2022 to a 3½-year low of 2.4% in September.

Asked at a news conference how Trump's election might affect the Fed's policymaking, Chair Jerome Powell said that "in the near term, the election will have no effects on our (interest rate) decisions."

The Fed has long guarded its role as an independent institution able to make difficult decisions about borrowing rates, free from political interference.