In Line With Expectations.. The Federal Reserve Cuts Interest Rates by 25 Basis Points for the First Time Under Trump

SadaNews - The Federal Reserve has cut interest rates by 25 basis points in support of the U.S. labor market after cracks started to appear, abandoning the wait-and-see policy it had followed since the end of last year. The Federal Open Market Committee voted on Wednesday to reduce the benchmark interest rate to a range of 4% to 4.25%, marking the first cut in borrowing rates since Donald Trump took office, after keeping it unchanged during five consecutive meetings. Federal Reserve: Unemployment Rate Has Slightly Increased but Remains Low The U.S. Federal Reserve stated in the statement accompanying the interest rate cut decision on Wednesday that data indicates the unemployment rate "has increased slightly, but it remains low." It added that the inflation rate "has risen and remains at relatively high levels." The wording of the Federal Reserve's September decision differed from the previous July statement, which indicated that economic activity growth had slowed in the first half of the year. The unemployment rate remains low, and labor market conditions are strong. Inflation remains somewhat elevated." The Federal Reserve maintained that uncertainty regarding economic forecasts "remains high" and that the committee pays special attention to the risks facing both tasks within the Federal Reserve's dual mandate. Federal Reserve Forecasts Indicate Additional Rate Cuts The median of the forecasts of U.S. Federal Reserve policymakers indicates further interest rate cuts of 50 basis points by the end of the year and a quarter-point cut in 2026, which is slightly higher than their quarterly forecasts made in June. This came after the Federal Reserve cut interest rates by 25 basis points on Wednesday in support of the U.S. labor market after cracks began to appear, abandoning the wait-and-see policy it had adopted since the end of last year.