Federal Reserve Cuts Interest Rates Amid Job Market Concerns

Thu Sep 18 2025 11:54:43 GMT+0300 (Eastern European Summer Time)

In a significant move, the Federal Reserve has reduced its key lending rate in response to warnings about a stalling job market. This marks the first rate cut since December, aimed at stimulating the economy.

The Federal Reserve has cut interest rates by 0.25 percentage points, citing concerns over a slowing job market despite the overall low unemployment rate. This decision is anticipated to lead to a series of reductions in the coming months. Fed Chairman Jerome Powell emphasized the need to respond to recent weaknesses in employment data, with predictions of further cuts depending on economic conditions.

It’s finally happening. After months of economic debate and mounting attacks from US President Donald Trump, the US central bank cut interest rates on Wednesday.

The Federal Reserve said it was lowering the target for its key lending rate by 0.25 percentage points. That will put it in a range of 4% to 4.25% - the lowest level since late 2022. The move - the bank's first rate cut since last December - is expected to kick off a series of additional reductions in the months ahead, which should help bring down borrowing costs across the US.

However, today's move carries a cautionary tale about the economy, reflecting increased consensus at the Fed that a stalling job market needs a boost in the form of lower interest rates. Unemployment is still low but we're seeing downside risks, Federal Reserve chairman Jerome Powell stated during a news conference following the announcement.

Although the Fed acknowledged that inflation persists, the recent trend indicating a decline in hiring is concerning. Analysts are predicting more rate cuts could be forthcoming as the economic landscape continues to change.