The US Federal Reserve has decided to cut interest rates by half a percentage point. It is the first such cut since the early days of the pandemic four and a half years ago.

The decision was announced on Wednesday at the Fed's regular policy meeting.

Fed Chair Jerome Powell said, "The economy is strong and patience has paid off."

Policymakers had been keeping the interest rate above 5 percent for more than a year to battle inflation, as consumers struggle with rising costs. The approach managed to cool prices, which led to the decision to lower the benchmark rate.

At a news conference following the meeting, Powell said, "This decision reflects our growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2 percent."

He added, "At the same time, reducing restraint too slowly could unduly weaken economic activity and employment."

The US unemployment rate has edged up, and high mortgage rates discourage people from buying homes.

So the Fed decided to move aggressively in the belief that lower borrowing costs will encourage investment and protect against a slowdown.

Powell said, however, that policymakers have not accomplished their "mission." They project they will cut the rate by another half a percentage point by the end of the year.