The Federal Reserve slashed interest rates by a half percentage point Wednesday and charted a course for two additional cuts this year followed by four more in 2025.

The action marks the Fed’s first easing of monetary policy since 2020 and the termination of its most aggressive inflation-fighting campaign since the 1980s.

The decision came in a split vote at the conclusion of the Fed’s two-day policy meeting as officials cut the central bank’s benchmark rate by 50 basis points to a new range of 4.75%-5.0%.

Rates had previously been held at a 23-year high since July 2023.

There was some division on the final decision, with Fed governor Michelle Bowman dissenting. She preferred to cut rates by 25 basis points instead of 50.

No Fed official has voted against a policy decision in two years, matching one of the longest such streaks in the past half-century. Moreover, no Fed governor has dissented on a rate decision since 2005.

The consensus among Fed officials at today’s meeting was that they now see two more 25 basis point cuts this year, followed by four more cuts next year and two more cuts in 2026.

Nine officials saw 4 cuts this year, seven saw three cuts, two officials saw two cuts this year, and one saw five cuts this year.

Fed Chair Jerome Powell, in a press conference with reporters, acknowledged the dissent from today's move but also said there was "broad support" for the cut and a "lot of common ground" among his fellow policymakers.

He also pushed back against the idea that the bigger 50 basis point cut was an attempt to play catch-up as the job market cools. There were some officials who wanted to cut at the Fed's last gathering in July, according to meeting minutes.

"We don’t think we are behind," he said. "We think this is timely but you can take this as a sign of our commitment not to get behind."

The Fed did wait longer than some other central banks to begin easing monetary policy, but Powell said "that patience has really paid dividends" since it allowed policymakers to get more comfortable about the downward path of inflation.

That confidence was reinforced by five consecutive reports from the Consumer Price Index that showed progress after some hotter-than-expected readings in the first quarter.

But in that time, the labor market has also clearly slowed down. Employment decelerated over the summer, with 118,000 jobs created in June, 89,000 created in July, and 142,000 in August — all below the average monthly gain of 202,000 over the prior 12 months.