September 17, 2025—As most economists expected, the Federal Open Market Committee (FOMC) lowered its benchmark interest rate by 25 basis points today to a Fed Funds target rate range of 4.00 to 4.25%. The Fed also released its quarterly “dot plot” projections for the fed funds rate through the end of 2025 and longer, indicating signs of economic weakness and raising expectations for two additional rate cuts this year. The dot plot shows the projected rate as submitted by both voting and non-voting members of the Committee. The vote was 11-1 with the lone dissension being new Committee member Stephen Miran, who favored a 50-basis point cut.
The dot plot graph shows that nine members of the Committee believe they will lower rates 50 basis points by the end of 2025, and ten members believe in multiple cuts next year.
Fed Chair Jerome Powell cited a weakening economy as the basis for the cuts. “Labor demand has softened, and the recent pace of job creation appears to be running below the break-even rate needed to hold the unemployment rate constant,” he told reporters in his post-meeting press conference. “I can no longer say the labor market is very solid. The unemployment rate rose to 4.30% in August, the highest in four years. Fed officials also remain concerned that tariff uncertainty still hasn’t completely taken effect on the economy.
Source: Bloomberg