The Federal Reserve has cut its benchmark interest rate by 50 basis points, lowering it from 5.25% to a range of 4.75% to 5%, marking the first reduction in four years. This move aims to alleviate high borrowing costs and support a slowing labor market, while inflation has decreased to 2.5%, close to the Fed's target. The decision has received mixed reactions; investors are optimistic, pushing stock and bond prices higher, while Republican presidential nominee Donald Trump criticizes it as either a sign of a weak economy or a political maneuver. The rate cut is expected to benefit consumers by reducing costs on loans and mortgages but may also lower returns on savings accounts. The Fed's future plans include further rate reductions over the next few years, contingent on economic conditions. Global central banks, including the Bank of England and the Bank of Japan, are also making rate decisions in response to changing inflation dynamics.