Federal Reserve cuts interest rates for first time this year, sees 2 more cuts in 2025

[BumRushDaShow]

Source: Yahoo! Fnance

Wed, September 17, 2025 at 2:01 PM EDT


The Federal Reserve cut interest rates by a quarter percentage point Wednesday, its first reduction of 2025, and projected two more cuts for the rest of this year.

The central bank voted in a split decision to cut its benchmark interest rate to a range of 4.00% to 4.25%. The 25-basis point cut marked the first time the Fed has eased rates since last December. Newly confirmed Fed governor Stephen Miran disagreed with the decision and preferred to cut rates by a half a percentage point.

The median estimate from all Fed officials is that there will be two more rate cuts this year, up from a prior estimate released in June, as the labor market softens while inflation remains sticky.

“Job gains have slowed, and the unemployment rate has edged up. But remains low,” officials said in their statement. A downgrade from the July meeting statement’s characterization of labor market conditions as “solid.” “In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” officials said in their statement.

Read more: https://finance.yahoo.com/news/federal-reserve-cuts-interest-rates-for-first-time-this-year-sees-2-more-cuts-in-2025-180107133.html

[Lovie777]

1. Unemployment is low?....................

F you guys.

[BumRushDaShow]

6. It's Biden's "low" UE and not like the near 15% during 45's first term

[twodogsbarking]

2. Those who do not understand economics are doomed to fuck it all up, and repeat it.

[Cheezoholic]

3. The safe crackers have the combination, the poor man will jack even more debt and the bank robbers will feast n/t

[SWBTATTReg]

4. Economy seems to be slowing, but interest rate cuts won't do the trick. Getting rid of the trash in the WH (and his

Last edited Wed Sep 17, 2025, 02:45 PM - Edit history (1)

idiot policies would go a lot more further in boosting the future prospects). tRUMP w/ his stupid policies on/off in tariffs, etc. has confused the markets and investors to no end. What we're paying now is the tRUMP tax, no less, and we won't see the end of these taxes until he's gone. For some reason, he seems to think that we're all on a giant gameboard, and he's playing around w/ things he doesn't know, seeing what happens. Meanwhile, we're all suffering.

An update from another DU posting...one which I agree w/ that the interference by tRUMP is somewhat disrupting the markets...:

The Federal Reserve's expected interest-rate cut will increase risks for stocks, bonds, and the dollar if it's perceived to be driven by political pressure. That's according to a Sept. 15 note from David Kelly, chief global strategist at J.P. Morgan Asset Management.
The Trump administration’s unprecedented attempt to control the Fed Board of Governors is causing grave concerns about the future independence of the U.S. central bank among economists and traders at home and abroad.

[LetMyPeopleVote]

5. trump will still not be happy

Link to tweet

[Fiendish Thingy]

7. WHEEE!

Election year recession, here we come!

I don’t fault the Fed, they are truly between a rock and a hard place with inflation heating up along with unemployment numbers.

The economic destruction from tariffs and immigration raids has forced their hand.

For those who don’t remember the 70’s, this was called Stagflation.

[IronLionZion]

12. Remember how Volcker defeated stagflation?

intentionally increasing rates sky high to cause a recession. Unemployment rate was over 10%. One of many factors handing the presidency to Reagan in 1980.

https://en.wikipedia.org/wiki/Paul_Volcker#Chairman_of_the_Federal_Reserve

MRGA Make Recession Great Again

[Fiendish Thingy]

13. If Trump gains control of the Fed, and it's no longer an independent agency, all bets are off

The next administration will be saddled with a crippled economy and a Fed board that may be difficult to purge.

[IronLionZion]

14. Biden and Obama were both saddled with badly crippled economies

Dems have experience fixing what GOP breaks.

[Fiendish Thingy]

15. But that included cooperation from the Fed

If this time next year the Fed is majority MAGA, all bets are off.

[Skittles]

18. yes, Dems have to spend a couple years cleaning up shit

repukes can start their bullshit on day one

[Prairie Gates]

8. The magical rate cut looks like a fizzle - they're not going to solve this problem

with neoliberalism's usual "monetary policy" parlor tricks.

[Mark.b2]

9. I would have preferred the half-point...

I’m in supply chain and logistics world, and we are in year three of a freight recession. 2022 was glorious and nothing but disappointment since.

Our retailer customers are not shipping big yet for Christmas yet again.

The service economy is doing pretty well, but unfortunately for me, it doesnt require trucks and trains!

I suppose a small cut albeit a few months late is better than nothing. Maybe by spring, these cuts will manifest .

[ananda]

10. They caved. Trump won.

The economy lost.

[BumRushDaShow]

17. The unemployment picture suggested this is what they would do

as it will probably get worse DUE TO the tariffs and the massive push for using AI to replace employees.

[progree]

19. Unfortunately, the tariffs and probably AI will exacerbate the already rapidly rising inflation

as will the rate cuts

The CPI rise averaged 3.5% over the past 3 months on an annualized basis (core CPI: 3.6%)
The August one month increase annualized is: CPI: 4.7%, (core CPI: 4.2%)
Graphs: https://www.democraticunderground.com/?com=view_post&forum=1014&pid=3531703
It's not May anymore

As for the AI - it may provide some economic benefits. But it will certainly cause electricity rates to rise sharply, which are already rising at higher than overall inflation rates, and we're just getting started, relatively speaking, with the crazy data centers

The unemployment picture suggested this is what they would do
as it will probably get worse DUE TO the tariffs and the massive push for using AI to replace employees.

[BumRushDaShow]

21. They are in a bind

ONE outlet - CNBC - Fed forecasts only one rate cut in 2026, a more conservative outlook than expected claimed that Powell only wanted just one more cut before the end of 2026, whereas the other news/business sites seemed to ignore that and stick with reporting the 2 cuts this year.

CNBC looked at one of your parameters that DID release this month - the "dot plot".



(the Fed has it in a PDF as part of their report - https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20250917.pdf)


The 1 cut would make sense given the rising inflation part too, in order to attempt to keep a "lid" on it (as I have observed with the pattern on their graphs of the current rate vs the monthly inflation fluctuations, which was actually fascinating to visualize ).

[durablend]

11. Super!

My savings interest is dropping and credit card rates sure as hell aren't going to lower if recession is looming.

[progree]

16. "Fed officials have also had to take into account elevated levels of inflation in recent weeks."

https://finance.yahoo.com/news/live/stock-market-today-sp-500-nasdaq-slip-as-federal-reserve-ushers-in-first-rate-cut-of-2025-200042050.html

Fed Chair Jerome Powell said during a press conference that the Fed decision was a "risk management cut" as the labor market has been deteriorating against a backdrop of elevated inflation.

. . . Fed officials have also had to take into account elevated levels of inflation in recent weeks. --

Yeah no kidding

The CPI rise averaged 3.5% over the past 3 months on an annualized basis (core CPI: 3.6%)
The August one month increase annualized is: CPI: 4.7%, (core CPI: 4.2%)



More from where the graphs came from: https://www.democraticunderground.com/10143528031#post12

Yes Virginia, we have a rising inflation problem. It's not May anymore.

[progree]

20. The power of inflation: you know how retail sales increased a hefty 0.6% in August, per the media?

and per the Commerce Department, headed by Commerce Secretary Howard "not a lunatic" Lutnick
https://finance.yahoo.com/news/retail-sales-show-us-consumer-spending-holds-up-but-almost-everyone-is-looking-for-deals-171632523.html

https://www.census.gov/retail/sales.html

But when inflation adjusted by the 0.4% rise in the CPI in August

then inflation-adjusted, aka real retail sales rose by a quite modest 0.2%.

Not the "hefty" and "robust" and "strong" and such characterizations of the media (I've seen all three of these)

It's not May anymore.