US meeting: In accordance with expectations, the US Federal Reserve’s Federal Open Market Committee (FOMC), chaired by Jerome Powell, reduced the most important interest rate on Wednesday 17 September 2025 by 25 basis points. This brings the federal fund rate to a range of 4.00% to 4.25%. It was the first rate reduction since December 2024, when the central bank lowered the rates by 25 basis points. Recent weakness in the labor market has increased expectations that the Fed would lower the rates, even if inflation is still above the target level of 2%. “Recent indicators indicate that the growth of economic activity has moderated in the first half of the year. Working profit has slowed down, and the unemployment rate has risen, but remains low. Inflation has moved and somewhat increased,” the Federal Reserve said. The US unemployment rate rose to 4.3 percent in August, from 4.2 percent in July. US work growth was at 22,000 in August, and dropped from 79,000 in July 2025. Besides, the US economy created 9,11,000 fewer jobs in the 12 months to March than previously estimated. US Fed policy: Key Highlights Here are five important takeaways from the US Fed’s September policy decision: 1. US Fed -cutting rates The US Fed finished measures with 25 BPS and said it would assess the incoming data, the developing prospects and the balance of the risk. The FOMC voted in favor of a 25-base point rate with a majority of 11: 1. Stephen Miran was the only divisor, preferring to lower the target range for the federal fund rate by 50 basis points. “The committee has decided to lower the target range for the federal fund rate by 1/4 percentage point to 4 to 4-1/4 percent. When considering additional adjustments to the Federal Fund rate target, the committee will carefully judge the inbound data, the developing prospects and the balance of risks,” the US Fed said. According to the US Fed meeting 2025 direct updates here, the central bank added that it would continue to reduce its stake in Treasury security, agency debt and agencies related to securities. 2. More rate cuts are likely to see the FOMC the possibility that the federal fund rate is dropping to 3.6% by the end of the year. However, the central bank reiterated that it would judge incoming data and developing situations before doing further rate cuts in the coming months. “The median participant projects that the appropriate level of the federal fund rate will be 3.6 percent at the end of this year, 3.4 percent at the end of 2026, and 3.1 percent at the end of 2027. This road is 1/4 percentage point (25 bps) lower than what was projected in June,” Powell said. 3. Growth forecast see a slight increase in the FOMC economic projections show that the median participant projects the US GDP to rise by 1.6 percent this year and 1.8 percent in 2026 and 1.9 percent in 2027, slightly stronger than in June. According to the June projection, US GDP would rise by 1.4 percent in 2025, 1.6 percent in 2026 and 1.8 percent in 2027. Activity in the housing sector remains weak. However, business investment in equipment and intangible things recorded from last year’s rate. 4. Fed -flags disadvantage risks for employment The Fed has emphasized the moderation of wage growth, falling growth in workforce and the delayed payroll gains. “The demand for labor has softened, and it seems that the recent rate of job creation below the ‘break’ rate is needed to keep the unemployment rate constant,” Powell said. “In this less dynamic and somewhat softer labor market, the disadvantage of the employment seems to have risen. In our Sep, the median projection for the unemployment rate at the end of this year is 4.5 percent and then removed,” Powell added. 5. Inflation to stay above 2% until 2027 is the Fed’s median projection for total PCE inflation in 2025 3 percent. It could drop to 2.6 percent in 2026 and in 2027 to 2.1 percent. The central bank therefore does not see its preferred inflation meter below the 2 percent target at least in the next two years. “In the short term, over the course of this year, measures for inflation expectations have risen in balance on rates, as reflected in both market and survey-based measures. In addition to the next year or so, most measures of longer-term expectations remain in line with our 2 percent inflation goal,” says Powell. Read all market -related news here read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or brokerage firms, not coin. We advise investors to consult with certified experts before making investment decisions, as market conditions can change quickly and conditions can vary.
US meeting: Jerome Powell-led FOMC reduces interest rate by 25 bps; 5 Key Highlights
