Fed cuts interest rates a quarter point

A television station broadcasts the Federal Reserve's decision to cut rates on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, Sept. 17, 2025. Federal Reserve officials lowered their benchmark interest rate by a quarter percentage point and penciled in two more reductions this year following months of intense pressure from the White House to slash borrowing costs.

The cut is ‘unlikely to bring much relief to borrowers’

(Image credit: Michael Nagle / Bloomberg / Getty Images)

published 18 September 2025

What happened

The Federal Reserve’s Open Market Committee yesterday trimmed its benchmark interest rate by a quarter percentage point, its first cut since President Donald Trump took office. It was the Fed’s first meeting since Trump tried to fire one of its governors, Lisa Cook, as part of his campaign to assert control over the traditionally independent central bank.

Who said what

The Fed judged that “labor-market softness outweighed recent setbacks on inflation,” said The Wall Street Journal. A “narrow majority” of the board also “penciled in at least two additional cuts this year,” suggesting a “broader shift toward concern about cracks forming in the job market.”

All but one of the Fed officials voted for the quarter-point cut. “Lone dissenter” Stephen Miran pushed for cutting a half-point, CNN said, which is “hardly a surprise” since he is on unpaid leave from Trump’s Council of Economic Advisers and the president “fervently” wants sharply lower borrowing costs. Miran is “Trump’s wholly owned subsidiary,” the Journal’s editorial board said, and the president also “owns” this rate cut, “having staked so much on his political assault on the Fed.” Maybe “everything works out fine,” but the rate cut can’t “offset” either of the economic “negatives” the Fed identified yesterday: Trump’s tariffs and immigration crackdown.

What next?

The “well-telegraphed” rate cut, to between 4% and 4.25%, is “unlikely to bring much relief to borrowers,” The Washington Post said. And given the economy’s “stagflation-lite” signals, “what comes next” isn’t clear.

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Rafi Schwartz has worked as a politics writer at The Week since 2022, where he covers elections, Congress and the White House. He was previously a contributing writer with Mic focusing largely on politics, a senior writer with Splinter News, a staff writer for Fusion's news lab, and the managing editor of Heeb Magazine, a Jewish life and culture publication. Rafi's work has appeared in Rolling Stone, GOOD and The Forward, among others.