The Federal Reserve's decision could potentially mark an economic milestone for Americans battling higher cost of living.

President Joe Biden is celebrating the Federal Reserve’s decision to lower interest rates by saying it shows that inflation has eased.

Some forecasters expect the Fed to cut interest rates by a quarter-point Wednesday. Most, however, expect a half-point reduction. The CME FedWatch forecast tracker favored a half-point cut by a 55-45 margin at midday. (Earlier Wednesday, forecasters rated the probability of a half-point reduction even higher.)

The federal funds rate is the interest banks charge each other for overnight loans. Set by the Federal Reserve, it's a basis for other interest rates.

The Federal Reserve on Wednesday cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation but also made borrowing painfully expensive for American consumers.

St. Louis Federal Reserve Bank President Alberto Musalem on Friday said the U.S. central bank should cut interest rates "gradually" after what he called the "strong and clear message" of a half-point interest-rate cut last week,

A top Federal Reserve official said the US central bank should revert to cutting interest rates “gradually”, after a larger than usual half-point reduction earlier this month. St Louis Fed president Alberto Musalem said the US economy could react “very vigorously” to looser financial conditions,

The Federal Reserve cut interest rates by half a percentage point on Wednesday, even as U.S. stocks traded near record highs. This unexpected move has investors looking to history for clues about what might happen next in the markets.