The rate cut is the first in more than four years of increases to combat inflation.

WASHINGTON —

The U.S. Federal Reserve cut its key interest rate by half a percentage point on Wednesday, a massive cut and a dramatic reversal two years after its first rate hike to combat inflation that made borrowing more expensive for consumers.

The rate cut, the first in more than four years, reflects the U.S. central bank’s desire to focus on shoring up the labor market, which has shown signs of weakening.

The move, just weeks before the presidential election, also has the potential to alter the economic outlook just as Americans prepare to cast their ballots.

The central bank’s decision will take the key interest rate to around 4.8 percent, down from a two-decade high of 5.3 percent, where it has been for 14 months as it struggled to curb the worst run of inflation in four decades.

Inflation has eased from a peak of 9.1% in mid-2022 to a three-year low of 2.5% in August, not far above the Fed’s 2% target.

Fed officials also said they expect to cut their key interest rate by an additional half-percentage point at their final two meetings of the year, scheduled for November and December. They expect four more cuts in 2025 and two more in 2026.

In a statement, the Fed came closer than it has in the past to declaring victory over inflation: It said it had “gained greater confidence that inflation is moving sustainably toward 2%.”

Even though the central bank now believes inflation is primarily defeated, many Americans remain upset about high prices for groceries, gas, and rent, among other things.

Former President Donald Trump blames the administration of President Joe Biden and Vice President Kamala Harris for causing an inflationary surge. Harris, for her part, has said Trump’s promise to impose tariffs on all imports could further raise prices for consumers.

The Fed’s interest rate cuts should, over time, lower borrowing costs for mortgages, cars and credit cards, boosting Americans’ finances and supporting increased spending and growth.

Homeowners will be able to refinance their mortgages at lower rates, save on their monthly payments, and may even be able to move credit card debt into lower-cost personal loans or home equity lines of credit. Businesses will also be able to borrow and invest more.

Average mortgage rates have already dropped to an 18-month low of 6.2 percent, according to Freddie Mac, leading to a surge in demand for refinancing.

The U.S. sued the owners of the ship, which caused Baltimore Bridge to collapse for $100 million.

The U.S. government filed a lawsuit on Wednesday against the two companies that owned the ship that caused a bridge collapse in Baltimore in March. The lawsuit seeks to force the companies – based in Singapore – to pay compensation of more than 100 million dollars (almost 90 million euros)  for the cost of the “disaster response and the cleanup of the wreck,” the Justice Department said in a statement.

A vessel owned by Grace Ocean Private Limited and Synergy Marine PTE LTD struck the Francis Scott Bridge in the coastal city of Baltimore in late March, causing it to collapse and killing six construction workers who were doing repair work on the road. “With this civil lawsuit, the Department of Justice is working to ensure that the costs of cleaning up the channel and reopening the Port of Baltimore are borne by the companies that caused the accident, not the American taxpayer,” U.S. Attorney General Merrick Garland said in the statement.

The lawsuit, filed in a Maryland court, accused the companies responsible for the ship of acting “negligently” by failing to address various technical problems with the vessel that ultimately led to the accident. “This was an entirely avoidable catastrophe, the result of a series of eminently foreseeable errors made by the owner and operator of the vessel Dali,” said Brian M. Boynton, one of the prosecutors in charge of the case.

by the companies that caused the accident, not the American taxpayer,” U.S. Attorney General Merrick Garland said in the statement.

The lawsuit, filed in a Maryland court, accused the companies responsible for the ship of acting “negligently” by failing to address various technical problems with the vessel that ultimately led to the accident. “This was an entirely avoidable catastrophe, the result of a series of eminently foreseeable errors made by the owner and operator of the vessel Dali,” said Brian M. Boynton, one of the prosecutors in charge of the case.

The body of the sixth victim of the Baltimore Bridge accident found

Shortly after the accident, Grace Ocean filed a lawsuit asking a judge in Maryland to limit the company’s liability to the value of the ship, which they estimate at around 42.5 million dollars (about 38 million euros). With this new legal action, the federal government has joined the city of Baltimore, which filed another lawsuit against the companies that own the ship in April.

Relatives of the six people killed in the accident, all of them Latin American migrants from Mexico, El Salvador, and Honduras, have also stressed that they will file their lawsuits against the companies. At a press conference on Tuesday, the widow of Miguel Luna, one of the workers who died in the accident, stressed that she will seek justice in the case on behalf of “all essential workers.”