Federal Reserve Cuts Federal Funds Rate by 25 Basis Points to 4.00–4.25% in 11-1 Vote

The Federal Open Market Committee voted 11-1 on 17 September 2025 to cut the federal funds rate by 25 basis points, lowering the target range to 4.00–4.25%. The decision brings the rate to its lowest level since December 2022 and was the first cut since December 2024, resuming the easing cycle that the Fed began in September 2024. The sole dissenting vote came from Stephen Miran, who preferred a larger 50 basis point reduction.

The committee's statement cited downside risks to employment as the primary rationale for the cut.

RISK-MANAGEMENT CUT

The FOMC has now moved the rate lower from its peak of 5.25–5.50%.

Chair Jerome Powell described the move as a risk-management cut, with the FOMC statement noting that inflation had moved up and remained somewhat elevated while downside risks to employment had risen.

PROJECTIONS

The updated Summary of Economic Projections, released alongside the rate decision, showed a median projection of two further quarter-point cuts by the end of 2025.