By Tom Burnett CFA
On September 17, 2025, the Federal Reserve Open Market Committee (“FOMC”) voted to cut interest rates by 25 basis points. The new range is 4.0-4.25%. This cut is the first cut in rates since December 2024. The vote was 11-1 with new Board member Stephen Mirani voting for a 50-basts point reduction. In its Statement, the FOMC noted recent weakness in the labor market as a signal of slowing economic growth. The Board remains committed to an inflation rate 2.0%, but does not want to see unemployment increasing sharply. The FOMC hinted that additional cuts may be necessary later this year. The Fed will continue to shrink its balance sheet by selling investments in Treasury bonds and mortgage-backed securities.
The next FOMC meeting is scheduled for October 29, 2025.
Tom Burnett CFA is Director of Research