The US Federal Reserve announced its next interest rate cut on September 17, 2025. This was the first rate cut since December 2024, lowering the federal funds rate target range by 0.25 percentage points to 4.00% - 4.25%. The Fed signaled it may consider additional rate cuts later in the year depending on incoming economic data, especially due to a slowing labor market and elevated inflation concerns.

Details of the September 17, 2025 Announcement

• The Fed cut rates by a quarter point (0.25%) from the previous 4.25% - 4.50% range.
• The decision reflected a cautious approach in response to slowed job gains and slightly rising unemployment.
• The Fed emphasized monitoring economic indicators for future policy adjustments.
• This cut may be followed by two more rate reductions within 2025, although the pace depends on inflation and labor market trends.

Background Context

• Before the announcement, expectations had built for the Fed's first rate cut since late 2024 to help stimulate growth amid a cooling job market.
• The reduction aims to lower borrowing costs for consumers and businesses.
• Inflation remains above the Fed's 2% target, requiring a balanced approach to rate changes.

In summary, the US Federal Reserve's rate cut announcement took place on September 17, 2025, with indications of more potential cuts later in the year based on economic developments.