SAN FRANCISCO (KPIX/AP) – It was a rough day of trading on Wall Street after the U.S. Federal Reserve cut its key interest rate for the first time in more than a decade.
The central bank cut its benchmark rate — which affects many loans for households and businesses — by a quarter-point to a range of 2% to 2.25%. It’s the first rate cut since December 2008 during the depths of the Great Recession, when the Fed slashed its rate to a record low near zero and kept it there until 2015.
Wednesday’s move was an effort to counter threats ranging from uncertainties caused by President Donald Trump’s trade wars to chronically low inflation and a dim global outlook.
“It is intended to ensure against downside risks from weak global growth and trade policy uncertainty, to help offset the effects these factors are currently having on the economy and promote a faster return of inflation,” said Federal Reserve Chairman Jerome Powell.
The chairman said there could be more cuts, but the central bank was not intending to embark on a long cycle of lowering rates.
Wednesday’s cut sparked a sell-off on Wall Street.
Tech stocks fell the most. Microsoft lost 2.9%.
The S&P 500 fell 32 points, or 1.1%, to 2,980.
The Dow Jones Industrial Average lost 333 points, or 1.2%, to 26,864. It was down 478 earlier.
The Nasdaq fell 98 points, or 1.2%, to 8,175.