The Fed action brings the federal funds rate overnight bank lending rate down to 4.5%, and the more symbolic discount rate on Fed loans to banks down to 4.0% from 4.5%.
In making the announcement, the Fed noted that the risks to the economy were still tilted to the downside.
It was the fourth interest rate cut this year from the Fed. The last time the Fed changed rates between scheduled meetings of the policymaking Federal Open Market Committee (FOMC) was on January 3.
The next scheduled FOMC meeting is May 15.