The Federal Reserve lowered interest rates to 4.00%-4.25% at its September meeting, in line with market expectations.
2025-09-18 02:23:23
At the Federal Reserve's September meeting, the Fed lowered the federal funds target rate range (FFTR) by 25 basis points to 4.00%-4.25%, a move that was fully in line with market expectations.
Key Points from the Federal Open Market Committee (FOMC) Statement
Expectations suggest another 50 basis points of rate cuts before the end of the year, and another 25 basis points in each of the next two years.
Job growth slowed and the unemployment rate rose slightly but remained low.
Inflation has risen and remains "slightly elevated."
Economic growth slowed in the first half of this year.
The statement said it was focusing on two aspects of the dual mission (Note: the Federal Reserve’s dual mission is price stability and full employment).
Maintain the current pace of balance sheet reduction.
Officials' median forecast for the federal funds rate at the end of 2025 is 3.6% (previously 3.9%).
Officials' median forecast for the federal funds rate at the end of 2027 is 3.1% (previously 3.4%).
Officials' median forecast for the federal funds rate at the end of 2026 is 3.4% (previously 3.6%).
Officials' median forecast for the federal funds rate at the end of 2028 is 3.1%.
Officials' median forecast for the longer-run federal funds rate was 3.0% (the same as previously expected).
Expectations show an additional 50 basis points of rate cuts in 2025, 25 basis points in 2026 and another 25 basis points in 2027.
Expectations show that nine of the 19 officials believe there will be two more interest rate cuts in 2025, two believe there will be one, and six believe there will be no more rate cuts.
Policymakers expect the unemployment rate to be 4.5% at the end of 2025, unchanged from their June forecast of 4.5%.
Expectations showed one policymaker estimated the appropriate policy rate range for the end of the year was 4.25%-4.50%, while another thought it should be 2.75%-3.00%.
Policymakers expect personal consumption expenditure (PCE) inflation to be 3.0% at the end of 2025, the same as expected in June; core PCE inflation is expected to be 3.1%, also the same as expected in June.
Policymakers expect gross domestic product (GDP) growth to be 1.6% in 2025, higher than the 1.4% forecast in June; the long-term growth rate is expected to be 1.8%, the same as the June forecast.
Key Points from the Federal Open Market Committee (FOMC) Statement
Expectations suggest another 50 basis points of rate cuts before the end of the year, and another 25 basis points in each of the next two years.
Job growth slowed and the unemployment rate rose slightly but remained low.
Inflation has risen and remains "slightly elevated."
Economic growth slowed in the first half of this year.
The statement said it was focusing on two aspects of the dual mission (Note: the Federal Reserve’s dual mission is price stability and full employment).
Maintain the current pace of balance sheet reduction.
Officials' median forecast for the federal funds rate at the end of 2025 is 3.6% (previously 3.9%).
Officials' median forecast for the federal funds rate at the end of 2027 is 3.1% (previously 3.4%).
Officials' median forecast for the federal funds rate at the end of 2026 is 3.4% (previously 3.6%).
Officials' median forecast for the federal funds rate at the end of 2028 is 3.1%.
Officials' median forecast for the longer-run federal funds rate was 3.0% (the same as previously expected).
Expectations show an additional 50 basis points of rate cuts in 2025, 25 basis points in 2026 and another 25 basis points in 2027.
Expectations show that nine of the 19 officials believe there will be two more interest rate cuts in 2025, two believe there will be one, and six believe there will be no more rate cuts.
Policymakers expect the unemployment rate to be 4.5% at the end of 2025, unchanged from their June forecast of 4.5%.
Expectations showed one policymaker estimated the appropriate policy rate range for the end of the year was 4.25%-4.50%, while another thought it should be 2.75%-3.00%.
Policymakers expect personal consumption expenditure (PCE) inflation to be 3.0% at the end of 2025, the same as expected in June; core PCE inflation is expected to be 3.1%, also the same as expected in June.
Policymakers expect gross domestic product (GDP) growth to be 1.6% in 2025, higher than the 1.4% forecast in June; the long-term growth rate is expected to be 1.8%, the same as the June forecast.
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