The Federal Reserve lowered its benchmark interest rate by 0.25 percentage points to a range of 4% to 4.25%, its first cut since December 2024. This decision addresses concerns about a slowing labor market and weaker economic growth. While the Fed projects further rate cuts in 2025, this is fewer than market expectations. The move comes despite inflation remaining above the Fed's target, highlighting a balancing act between inflation control and job growth. The decision followed political pressure from President Trump, though Fed Chair Powell emphasized the independence of the Fed's decisions based on economic data.

Prepared by Christopher Adams and reviewed by editorial team.