September 17, 2025
Today the federal reserve board decided to cut interest rates by 0.25%. It is now sitting at 4% to 4.25%. As you just heard –fed chairman Jerome Powell said every decision about interest rates from here on out is going to be risky because of this difficult economic conundrum we’re seeing over the two things the fed is supposed to be managing. Keeping inflation at its 2% goal and making sure there’s maximum employment. Those two things are constantly tugging at each other and it’s the fed’s job to keep them in balance. For the last few years – inflation has been the fed’s main concern but now – things are changing.
Today the Fed projected more Americans will lose their jobs this year. They are expecting the unemployment rate to hit 4.5% by the end of 2025 and then they believe it will stay above 4% for the next few years. In August — unemployment increased to 4.3%. So what’s going on? The fed chairman says it’s a combination of two trump policies.
But it’s not just the labor market… is inflation is still a problem. The Fed is projecting inflation is going to hit 3% by the end of this year and then should decrease in 2026 and 2027. The 2% goal won’t be met until 2028. The fed chair said inflation is coming from President Trump’s tariffs and just because it hasn’t fully hit you the consumer yet – doesn’t mean it’s not coming.
Speaking of President Trump, today was the first meeting for his newest appointee. Stephen Miran was the only dissenter on today’s rate cut decision. Instead of a 0.25% interest rate cut, Miran wanted what President Trump wants a 0.5% rate cut. He was out voted by the rest of the governors. And when asked about whether the fed can maintain its independence now that there’s a sitting governor who has not resigned from his day job at trump’s white house, Powell said he’s confident the fed can make decisions regardless of the pressure from politicians.
The Fed has penciled in two more interest rate cuts this year. Of course that will depend on what’s happening with the economy. The next meeting is in October.
Watch the full press conference there.
