U.S. Federal Reserve cuts key interest rate by a quarter-point
發佈日期: 2025-09-18 21:44
TVB News
The U.S. Federal Reserve cut its key interest rate by a quarter-point and projected it would do so twice more this year. This as concerns grow about the health of the U.S. labour market.
The move is the U.S. Federal Resrve's first cut since December. The Fed lowered its short-term rate to about 4.1 percent, down from 4.3 percent.
Fed officials, led by Chair Jerome Powell, had kept their rate unchanged this year.
This as they evaluated the impact of tariffs, tighter immigration enforcement and other economic policies of U.S. President Donald Trump's administration.
The central bank's focus has shifted quickly from inflation, which remains modestly above its 2 percent target, to jobs.
Hiring in the U.S. has grounded nearly to a halt in recent months. The country's unemployment rate has ticked higher.
Lower interest rates could reduce borrowing costs for mortgages, car loans and business loans, and boost growth and hiring.
Speaking at a press conference following the Fed's two-day meeting, Chair Jerome Powell said concerns about the U.S. labour market were crucial to the decision to lower the key interest rate.
"My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people," said Powell. "While the unemployment rate remains low, it has edged up. Job gains have slowed and downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated."
Just one Fed policymaker dissented from the decision, Stephen Miran, who Trump appointed and was confirmed by the U.S. Senate in a rushed vote late Monday just hours before the meeting began. Miran preferred a larger half-point cut.
Many economists had forecast there would be additional dissents, and the meeting's outcome suggests that Fed Chair Powell was able to patch together a show of unity from a committee that includes Miran and two other Trump appointees from his first term, as well as a Fed governor, Lisa Cook, whom Trump is seeking to fire.
Before the meeting, investors on Wall Street had projected five cuts for the rest of this year and next.
Fed Chair Powell noted the committee was pretty evenly split on whether to cut rates once or twice more this year.
As a result, he said the projected cuts should be seen as more a "probability" than a "certainty."
The Fed's move to cut rates puts it in a different spot from many other central banks overseas.
Last week, the European Central Bank left its benchmark rate unchanged, as inflation has largely cooled and the economy has seen limited damage, so far, from U.S. tariffs.
On Friday, the Bank of England is also anticipated to keep its rate on hold. That's as inflation in the UK at 3.8 percent remains higher than in the United States.
