<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The US Federal Reserve has cut its key interest rate by 0.25 points and projected it would do so twice more this year as concern grows at the central bank about the health of the nation's labour market.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The move is the Fed's first cut since December and it lowered its short-term rate to about 4.1 per cent, down from 4.3 per cent. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Fed officials, led by chair Jerome Powell, had kept their rate unchanged this year as they evaluated the impact of tariffs, tighter immigration enforcement, and other Trump administration policies on inflation and the economy.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/world/donald-trump-uk-visit-king-charles-iii-prepares-to-welcome-trump-windsor-castle/3fc8ad29-f31f-4424-9b29-6c6fbd5fe706" rel="" target="_blank" title=" 'Priceless and eternal': Trump, Charles speak at lavish banquet"><strong><span> 'Priceless and eternal': Trump, Charles speak at lavish banquet</span></strong></a><strong></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Yet the central bank's focus has shifted quickly from inflation, which remains modestly above its 2 per cent target, to jobs, as hiring has grounded nearly to a halt in recent months and the unemployment rate has ticked higher. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Lower interest rates could reduce borrowing costs for mortgages, car loans, and business loans, and boost growth and hiring.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"In this less dynamic and somewhat softer labour market, the downside risks to employment appear to have risen," Powell said at a press conference following the Fed's two-day meeting.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/world/us-federal-reserve-cuts-interest-rates/1d5e011a-a587-4964-ab44-a5e804ff1dcd" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Officials of the central bank also signalled that they expect to reduce their key rate twice more this year, but just once next year. Before the meeting, investors on Wall Street had projected five cuts for the rest of this year and next. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The Fed is facing both a challenging economic environment and threats to its traditional independence from day-to-day politics.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/household-electricity-bills-soared-faster-than-inflation-new-iselect-data/3592c382-efe9-4c91-bc2c-d95a7fd51f02" rel="" target="_blank" title=""><strong><span>Bills skyrocket faster than inflation as Aussies suffer</span></strong></a><span> </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>At the same time that hiring has weakened, inflation remains stubbornly elevated. It rose 2.9 per cent in August from a year ago, according to the consumer price index, up from 2.7 per cent in July and noticeably above the Fed's 2 per cent target.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It's unusual to have weaker hiring and elevated inflation, because typically a slowing economy causes consumers to pull back on spending, cooling price hikes. Powell suggested last month that sluggish growth could keep inflation in check even if tariffs lift prices further.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://www.9news.com.au/national/how-to-follow-9news-digital/29855bb1-ad3d-4c38-bc25-3cb52af1216f" target="_blank"><strong><em><span>DOWNLOAD THE 9NEWS APP</span></em></strong></a><strong><em><span>: Stay across all the latest in breaking news, sport, politics and the weather via our news app and get notifications sent straight to your smartphone. 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