Fed cuts key policy rate by quarter-point

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WASHINGTON, DC – JULY 10: Federal Reserve Chairman Jerome Powell testifies during a House Financial Services Committee hearing on Capitol Hill on July 10, 2019 in Washington, DC. Powell is testifying on monetary policy and the state of the economy. (Photo by Zach Gibson/Getty Images)

WASHINGTON (AP) – The Federal Reserve is cutting its key interest rate for the first time in a decade to try to counter threats ranging from uncertainties caused by President Donald Trump’s trade wars to chronically low inflation and a dim global outlook.

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.

The economy is far healthier now despite risks to what’s become the longest expansion on record.

The Fed repeats a pledge to “act as appropriate to sustain the expansion,” wording that markets have seen as a signal for possible future rate cuts.

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