US Fed cuts rates for first time in 2025 amid pressure from Trump, weaker job outlook
The central bank lowered the rate by a quarter of 1 percentage point, with two more cuts likely this year
The US Federal Reserve has announced that it will cut interest rates by a quarter of 1 percentage point in a widely anticipated move. The US central bank also expects two more quarter-point cuts this year.
The cut puts the target range for its main lending rate at 4 to 4.25 per cent. Still, market stakeholders are watching the Fed’s next moves and their timing.
For months, US President Donald Trump had slammed Fed Chair Jerome Powell for not reducing interest rates faster, but the Fed faces a balancing act in adjusting rates, mindful of the impact on a complicated economic situation.
Inflation rose at the fastest clip in August since the start of the year, with Trump’s sweeping tariffs fuelling more risks, but the jobs market is weakening.
Explaining the rationale, Powell said at a press conference that the Fed is squarely focused on achieving the dual mandate goals of maximum employment and stable prices.