The Federal Reserve cut interest rates by 0.25 percentage points (25 basis points) on September 17, 2025. This is the first rate cut of 2025, lowering the federal funds rate target range to 4.00% - 4.25%. The Fed also signaled plans for two additional 0.25 percentage point cuts later this year in response to signs of a weakening labor market and economic uncertainties. The decision was mostly supported by Fed officials, with one dissent advocating for a larger 0.50 percentage point cut.