U.S. Federal Reserve cuts interest rate by 0.25 points, signals more reductions this year

Noor Mohmmed

18/Sep/2025

The Federal Reserve has reduced the key interest rate by 0.25 points, marking its first cut since December.
Officials indicate two more rate reductions are expected later in 2025 to support economic growth.
The move aims to stimulate the U.S. economy while managing inflation and financial stability.

The U.S. Federal Reserve has cut its key interest rate by 0.25 points, marking the first reduction since December. This monetary policy decision comes amid ongoing concerns about slowing economic growth and inflationary pressures, and reflects the Fed’s commitment to supporting the U.S. economy.

Federal officials have indicated that this cut is just the beginning, signaling that two additional reductions in the key rate are likely later this year. The rate cut is aimed at boosting borrowing, investment, and consumer spending, which can help stimulate economic activity and ensure financial stability.

Analysts note that the Fed’s decision reflects a balanced approach to managing economic growth while keeping inflation under control. Lower interest rates reduce the cost of borrowing for businesses and households, encouraging spending on infrastructure, housing, and consumer goods. This, in turn, can support job creation and overall economic expansion.

The move is also significant for financial markets, as investors and institutions react to expectations of a more accommodative monetary policy. Lower rates typically increase liquidity in the economy, making it easier for companies to access capital and invest in growth opportunities.

Federal Reserve Chair emphasized that the central bank remains vigilant on inflation trends and will adjust policy as needed to ensure that the U.S. economy remains on a stable growth path. The decision underscores the Fed’s willingness to use its tools proactively to mitigate potential slowdowns in economic activity.

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U.S. Federal Reserve cuts interest rate by 0.25 points, signals more reductions this year

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