Financial News: Fed Cuts Rates By Quarter Point, Forecasts Two

Fed Cuts Rates By Quarter Point, Forecasts Two More Rate Cuts This Year

09/17/2025 - 14:27:00 (RTTNews)

(RTTNews) - In a widely expected move, the Federal Reserve on Wednesday announced that it has decided to lower interest rates by a quarter point, marking the first rate cut of 2025.

The Fed said it decided to lower the target range for the federal funds rate by 25 basis points to 4.0 percent to 4.25 percent, citing a shift in the balance of risks.

The accompanying statement noted recent indicators suggest economic growth moderated in the first half of the year, with jobs gains slowing and the unemployment rate inching up. The Fed also said inflation has moved up and remains somewhat elevated.

The decision to lower rates by a quarter point was not unanimous, with newly sworn in Fed Governor Stephen I. Miran preferring to lower rates by half a point.

The latest projections from Fed officials suggest they expect the central bank to lower rates two more times this year, with rates forecast in a range of 3.50 percent to 3.75 percent by the end of 2025.

Back in June, Fed officials had forecast rates in a range of 4.0 percent to 3.75 percent by the end of the year.

Fed officials' projections for consumer price inflation and the unemployment rate were unchanged, while their forecast for economic growth was upwardly revised to 1.6 percent from 1.4 percent.

The Fed noted uncertainty about the economic outlook remains "elevated" and said it is attentive to the risks to both sides of its dual mandate of maximum employment and inflation at the rate of 2 percent over the longer run.

The central bank's next monetary policy meeting is scheduled for October 28-29, with CME Group's FedWatch tool currently indicating a 93.2 percent chance the Fed will lower rates by another quarter point.

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