WASHINGTON — The Federal Reserve cut its key interest rate by half a percentage point in an emergency meeting on Monday, the central bank said.
The Federal Open Market Committee lowered the target range for the federal funds rate to a new level following the unscheduled session, according to a statement released after the meeting. The move comes as officials cited evolving economic conditions that prompted the action outside the regular schedule.
"The Committee decided to lower the target range for the federal funds rate by 50 basis points," the Fed said in its statement. Officials acted after assessing recent data on inflation, employment and broader financial conditions, the statement added.
The decision marks a significant step in the central bank's monetary policy. The half-point cut is larger than typical adjustments and reflects the use of an emergency procedure, which allows the Fed to convene outside its eight regularly scheduled meetings per year.
Details on the exact new target range remained limited in initial releases. The Fed's most recent policy stance prior to Monday had held the benchmark rate steady in recent months following earlier adjustments in 2025, according to public records from the central bank.
Federal Reserve Chair Jerome Powell is expected to provide further remarks in the coming days. Central bank officials have previously emphasized data-dependent decisions, balancing goals of maximum employment and price stability.
The emergency meeting follows ongoing monitoring of economic indicators. Markets had shown varying expectations ahead of the June 16-17 scheduled meeting, but recent developments prompted faster action, Fed officials indicated through the statement.
Economists and market participants have offered differing views on the potential impacts. Some analysts noted that lower borrowing costs could support economic activity, while others highlighted the need to monitor inflation trends closely. The Fed statement did not provide forward guidance on future moves.
This action comes amid a complex global and domestic economic environment. The U.S. economy has shown resilience in recent quarters, but policymakers continue to weigh risks from various sectors, the statement said.
As of Monday afternoon, the central bank had not released additional supporting documents or full economic projections tied to the emergency decision. Further details are expected in subsequent communications.
The Federal Reserve conducts monetary policy to promote its dual mandate of price stability and maximum sustainable employment. The emergency rate adjustment is the latest in a series of policy steps taken in recent years to address changing conditions.
Officials will continue to monitor incoming data, the statement concluded. The next scheduled FOMC meeting remains set for June 16-17.
