The US central bank cut the interest rate it pays banks for holding cash

The US central bank lowered the interest rate it pays banks for money they keep at the central bank. This change makes it cheaper for banks to borrow from each other, which should push down overall interest rates in the economy.

The US central bank uses this interest rate to control how much cash banks keep on hand and how much they lend. When the rate goes down, banks have less incentive to keep cash at the central bank. They are more likely to lend it out or invest it, making money cheaper to borrow for businesses and consumers.