The Fed's first rate cut of the cycle (September 2024)
Backfilled context carries a typed causal-confidence label and never claims a confirmed driver without human-attached evidence — a single reviewed reference establishes chronology, not causation.
What happened
On 18 September 2024 the Federal Reserve delivered its first rate cut since 2020, opting for a larger half-point move that took the federal funds target range to 4.75–5.00% and formally opened the easing cycle after the fastest hiking campaign in decades.
What was known then
At the time, inflation had cooled substantially from its 2022 peak while the labour market was softening. Markets were split between a quarter-point and half-point move right up to the decision, making the size of the cut the day's genuine unknown.
Market reaction
Front-end Treasury yields repriced around the decision and the message that further cuts would be data-dependent; equities ended the period around the meeting higher, though the immediate session reaction was choppy.
What was uncertain
How deep the cutting cycle would go, whether the half-point start signalled concern about the labour market, and whether inflation would stay subdued enough to keep the path open.
What changed afterward
The Fed followed with quarter-point cuts in November and December 2024, then shifted to a slower, more cautious path into 2025 as inflation progress became bumpier.
Why it still matters
Every FOMC decision we cover in the morning recap traces back to this pivot: the cutting cycle it opened, and the pace debate it started, still frame how rate headlines are read today.
Sources
Primary and official references reviewed for this entry.
◦ Federal Reserve (official)
Latest developments
Current coverage that genuinely overlaps this episode — nothing is linked for the sake of linking.
The Monetary Policy Committee voted 6–3 on July 29 to maintain Bank Rate at 3.75%; Megan Greene, Catherine L Mann and Huw Pill preferred an increase to 4%. CPI inflation has fallen to 2.6%, but the Committee expects it to rise later this year as higher energy prices pass through, and judges the risks to the inflation outlook tilted to the upside.
Minutes of the July 28–29 FOMC meeting, released August 19, record that most participants supported holding the target range at 3-1/2 to 3-3/4 percent while several favored a 25 basis point increase. Many participants assessed that policy tightening would likely be necessary if inflation did not decline, and participants judged inflation risks as skewed to the upside.
The Federal Open Market Committee kept the federal funds target range at 3-1/2 to 3-3/4 percent on July 29. Three of twelve voters — Beth M. Hammack, Neel Kashkari and Lorie K. Logan — dissented, preferring a quarter-point increase. The statement says inflation remains elevated relative to the 2 percent goal, partly on energy supply shocks, and repeats that the Committee "will deliver price stability".
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