- US Federal Reserve reduced interest rates by 0.25 percentage points, now at 4%-4.25%.
- This is the first rate cut since December 2024 and the lowest level since December 2022.
- The decision was made after signs of slower economic growth and a cooling job market.
- The Fed’s “dot plot” points to two more possible rate decreases before the end of 2025.
- Stocks and Bitcoin saw gains after the rate cut, which was approved by an 11-to-1 vote.
The US Federal Reserve announced a 0.25 percentage point reduction in interest rates on September 17, 2025. Rates now stand at 4%-4.25%. This move comes as economic indicators in the United States show signs of slowing growth.
In its official press release, the Fed stated that growth in the first half of the year had “moderated” and the job market had “slowed.” The decision, supported by an 11-to-1 vote, is the central bank’s first rate cut since December 2024. “Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated,” the Fed reported.
The Fed also shared its “dot plot,” a chart showing individual policymakers’ expectations. This latest update suggests that two more rate cuts could occur before the end of 2025. The projections also show a wide range of opinions among policymakers, with one anticipating as much as 1.25 percentage points in further reductions this year. The dot plot indicates one cut in 2026 and another in 2027.
After the announcement, the price of Bitcoin rose about 1%. Major U.S. stock indexes also saw increases. Chairman Jerome Powell and the Fed have faced ongoing calls for lower rates, especially from the Trump administration, which has urged both Powell and Governor Lisa Cook to reduce rates. The rate cut responds to the changes in economic data and sustained pressure from government officials.
The Fed emphasized that it would continue to monitor economic data, risks, and outlooks before adjusting rates again. For more data on the US dollar’s performance over the last 20 years, see the “Also Read” reference in the original article.
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