The US Federal Reserve has cut its benchmark interest rate for the first time since the global financial crisis.
The move, which takes effect immediately, is expected to help keep inflation down while also boosting economic growth.
The Federal Reserve will maintain its $2.25tn-a-month bond-buying programme, but will limit its bond purchases to $1.25 trillion a month.
The Fed also cut its quarterly rate target for the unemployment rate to 4.9% from 5.5%.
It said it would keep its benchmark federal funds rate unchanged.
The central bank has been under pressure to act amid fears that the US economy is running out of room to absorb its trillions of dollars of stimulus spending.
But the Fed has been hesitant to act, with the US unemployment rate at 6.9%, a level that would be the lowest since November 2009.
The unemployment rate in November was 7.1%, the highest since March 2014.
The rise in unemployment was due to a large influx of people looking for work.
It was followed by a large spike in home prices.
The price of housing fell sharply.