Jerome Powell, the Fed's chair, portrayed the rate cut as a recalibration of monetary policy in line with a lessening of inflation risks and an increase in unemployment risks.
Even as many emerging-market central banks have begun to cut rates, taking their cue from the Federal Reserve, investors expect more monetary tightening in Brazil over the coming year.
Analysts, nevertheless, said it was a foregone conclusion for the Fed to cut rates on Wednesday, either 25 basis points or 50bp, as US inflation has eased while the labor market softened.
The Bank of Japan and the European Central Bank want economic growth and a small amount of inflation, so they have cut their interest rates to below zero.
" Overall, we are looking at what is still a very strong labour market, " said Jerome Powell, the Fed's chairman, explaining why officials have so far demurred from cutting rates.
Job growth dropping off more than expected in recent months is something the Federal Reserve will be watching closely as it weighs interest rate cuts, a key factor for inflation.
Starting with the stockmarket crash in 1987 and continuing for more than three decades, the Fed earned a reputation for easing policy, notably by cutting interest rates, whenever share prices plunged.
In his first testimony to Congress since Mr Trump's return to the White House, Jerome Powell, the Fed's chairman, said he was in " no rush" to cut rates again.
2 of the major U.S. stock indices have closed at record highs as markets reflect on the Federal Reserve cutting the official interest rates on Wednesday.