The Federal Reserve cut its interest rate by 0.25 percentage points (25 basis points) on September 17, 2025. This cut lowered the federal funds rate to a range of 4.00% to 4.25%. It was the first rate cut of 2025 and was accompanied by signals of two more potential cuts later in the year. The decision was made in response to a weakening labor market and slower economic growth, with most policymakers supporting the quarter-point reduction except one dissenting vote for a half-point cut. Fed Chair Jerome Powell emphasized that the primary concern was risks in the labor market, while inflation remained somewhat elevated.