The Federal Reserve has unexpectedly cut interest rates by 50 basis points, lowering the benchmark rate to between 4.75% and 5%, a move aimed at alleviating economic pressures on households and businesses. Fed Chairman Jerome Powell emphasized the need for policy adjustments to maintain labor market strength and expressed confidence in ongoing GDP growth despite a cooling labor market. Although inflation has declined, it remains above the desired target, prompting the Fed to maintain a flexible approach to future rate changes based on incoming data. The decision was made with a vote of 11-1, with one dissenting member advocating for a smaller cut of 25 basis points. The Fed aims to achieve maximum employment while keeping inflation around 2% in the long run, but acknowledges the uncertain economic outlook. The committee will continue to monitor economic indicators carefully before making further adjustments to monetary policy.