U.S. Fed cut rates for the first time since 2008

U.S. Fed cut rates for the first time since 2008

The U.S. Federal Reserve cut interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn.

Policymakers led by Fed Chairman Jerome Powell voted 8-2 in favor of a small cut in the federal funds rate, and recommitted to their promise to "act as appropriate" to sustain the country's longest economic expansion in history.

Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%.

The rate cut follows months of pressure from U.S. President Donald Trump, who has broken with his predecessors' practice of walling off the central bank from politics.

But Powell said pressure from Trump did not factor in the Fed's decision. "We are not going to prove we are independent with our monetary policy," he said at a press conference.

"We are thinking of it as a mid-cycle adjustment to policy. I'm contrasting it with the beginning of a lengthy cutting cycle," CNN cited Powell as saying.

The central bank is hoping a rate cut will be the necessary injection to keep the U.S. economy healthy, especially because it has limited ammunition to respond to a downturn with historically low interest rates.