The US central bank cut the interest it pays banks to hold cash by a quarter point

The US central bank lowered the interest rate it pays banks for money they keep at the central bank. This change helps the central bank keep its main interest rate within its target range.

Banks get paid less for holding cash at the central bank. This makes it slightly more attractive for them to lend money out, rather than keeping it in reserves. The central bank uses this lever to fine-tune the overall cost of borrowing in the economy.