September 17, 2025
Uncertainty about the economic outlook remains elevated.
The Federal Reserve in their post-meeting statement, announcing their decision to cut the federal funds rate (the rate banks lend to each other) by a quarter percentage point to about 4.1%, down from 4.3%.
Why It Matters: The last rate cut from the Fed came in December 2024. Chairman Jerome Powell has previously expressed reluctance to cut rates, citing uncertainty with tariffs and stubborn inflation.
- The federal funds rate influences consumer borrowing costs by affecting the interest rates banks charge on financial products such as mortgages and car loans. A lower rate is favorable because it reduces the cost of borrowing.
- The Fed also signaled it could issue two more cuts before the end of the year.
More Context: This meeting also comes as the Fed faces internal upheaval: President Trump recently fired board member Lisa Cook over alleged mortgage fraud, though a federal appeals court ruled that she can remain on the Federal Reserve board while her case proceeds. Meanwhile, the Senate confirmed Stephen Miran to the Fed board in a 48-47 vote. Democrats have questioned his independence from the Trump administration, though Miran plans to take unpaid leave from his role as chairman of the White House Council of Economic Advisers during his term on the Fed board, which is currently set to end in January. “I will act independently, as the Federal Reserve always does, based on my own personal analysis of economic data, my own personal analysis of the effects of economic policies upon the economy, and act based on my judgment of the best economic policy possible,” Miran vowed.
Learn More:
by Karly Code, based in Kentucky
