The Federal Reserve cut interest rates by half a percentage point, signaling a shift in monetary policy and boosting confidence in the economy. Read what investors need to know.

The decision by the Fed's policy-setting committee to cut interest rates for the first time since March 2020 was prefaced by an unusual amount of market uncertainty as to how much the central bank would lower its benchmark rate from a two-decade high of 5.25% to 5.5%, where it has stood since July 2023.