As most financial experts predicted, the Federal Reserve cut interest rates today by a quarter percentage point to a range of 4% to 4.25% in order to address rising risks confronting the labor market.
Fed leaders predict two more cuts by the end of 2025 (down to 3.75%).
Donald Trump has been waging a high-pressure campaign for lower interest rates since taking office in January.
Fed Chair Powell: “In support of our goals and in light of the shift in the balance of risks, today the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point.” #FOMC pic.twitter.com/HFoopj40DY
— CSPAN (@cspan) September 17, 2025
More from NPR:
The Fed has been cautious about cutting interest rates this year, out of concern that Trump’s tariffs could rekindle inflation. Double-digit import taxes have raised prices on goods such as coffee, clothing and small appliances.
The overall cost of living in August was up 2.9% from a year ago. That was the largest annual increase in seven months.
Concerns about stubborn inflation have taken a back seat for now, though, to worries about a weakening job market.
U.S. employers added just 22,000 jobs in August, and revised figures show the economy actually lost jobs in June for the first time since 2020.
The unemployment rate remains low by historical standards, at 4.3%. But that’s partly because the administration’s crackdown on immigration is limiting the number of available workers.
Wednesday’s projections also showed that most officials predict unemployment to rise to 4.5 percent, matching their June forecast.
By the way – it’s worth noting that Trump has reportedly bought more than $1 billion in bonds since returning to the White House. Fun fact: when interest rates go down, bond prices go up. Huh…
BREAKING: The Federal Reserve cut its benchmark interest rate a quarter of a percentage point, opting for its first interest rate cut this year in an effort to revive the flagging labor market. https://t.co/RVuAiJvBiM pic.twitter.com/drNwtIkx1X
— ABC News (@ABC) September 17, 2025
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