Federal Reserve Announces First Rate Cut of 2025 Amid Rising Labor Market Concerns
The Federal Reserve made a significant move on Wednesday, lowering interest rates by 0.25 percentage points. This marks the first reduction this year, prompted by concerns over a slowing job market that have overshadowed ongoing inflation worries. Consequently, the benchmark rate now stands between 4% and 4.25%.
Fed Chair Jerome Powell identified a “cooling” labor market as the main catalyst for this decision. Unemployment reached 4.3% in August—the highest level since September 2017, excluding the pandemic period. The central bank’s latest projections indicate that two more cuts are likely before the end of the year, although some officials advocate for maintaining the current rates.
The decision was made amidst extraordinary political pressure from the Trump administration. Newly confirmed Fed Governor Stephen Miran was a dissenting voice, advocating for a larger half-point cut. Nonetheless, the markets reacted positively to the news, with the Dow gaining 450 points following the announcement.
For more detailed coverage of this development, read the full story on CNBC.