The Federal Reserve (the US central bank) cut interest rates by half a percentage point, on Wednesday, to begin what is expected to be a steady easing of monetary policy with a greater than usual reduction in borrowing costs in the wake of growing concern about the health of the labor market.

Policymakers on the US central bank's interest rate-setting committee said in their latest statement, "The committee has gained greater confidence that inflation is moving sustainably toward two percent, and estimates that the risks to achieving employment and inflation goals are approximately balanced."

Policymakers see the Federal Reserve's benchmark interest rate falling another half percentage point by the end of this year, another full percentage point in 2025, and a final half percentage point in 2026 to end in a range of 2.75 percent-3.00 percent.

After the US Central Bank’s decision, a number of central banks in the Gulf countries reduced interest rates, led by the UAE by 50 basis points, Kuwait by 25 basis points, Qatar by 55 basis points, and Bahrain by 50 basis points.

A statement by the Central Bank of Qatar published on social media stated that the interest rate on lending fell to 5.70 percent, on deposits to 5.20 percent, and on the repurchase rate to 5.45 percent.

A statement by the UAE Central Bank stated that the country reduced the base interest rate applied to overnight deposit facilities by 50 basis points today, Wednesday, from 5.40 percent to 4.90 percent