The US central bank just made it cheaper for banks to hold cash

The US central bank lowered the interest rate it pays banks for money they keep at the central bank. This makes it less expensive for banks to hold onto extra cash instead of lending it out.

The US central bank uses this interest rate to control how much money banks lend to each other overnight. When the rate goes down, banks have less incentive to keep their money at the central bank, which can encourage more lending in the broader economy. This is a small adjustment, but it reflects the central bank's ongoing effort to manage the overall cost of money.