The Fed Cut Interest Rates: What Happens Next?

At its Sept. 17 meeting, The Fed cut interest rates by a quarter of a percentage point. Borrowing costs have been reduced in order to “boost hiring and prevent a surge of unemployment,” according to Investopedia. This marks the first reduction of 2025, and there are two more cuts projected by the end of this year. 

Key Takeaways:

• The fed funds rate was lowered to a range of 4% to 4.25%. Projected, additional cuts are expected to drop the range between 3.5% and 3.75%.

• The vote to cut the rate was met with one dissenting opinion from Stephen Miran; 11 committee members voted for the quarter point reduction and Miran voted for a larger half point cut.

• In order to “push down” inflation, the rates have been held steadily up until the Sept. 17 cut. However, growing concerns about President Trump’s tariffs and unemployment concerns have influenced the ultimate decision to cut the rates. 

Interested in reading more? See this Investopedia article.

Source: The New York Times, Federal Reserve