The , commonly known as the Fed, lowered its benchmark rate Wednesday by a quarter percentage point, the first such cut since last year.
The Fed cut the benchmark lending rateto a range between 4.0 percent and 4.25 percent.
The Fed due to uncertainty over how President ‘s import tariffs might affect inflation and the overall economy.
Markets expect more cuts during Fed meetings in October and December, despite inflation hovering above the Fed’s 2% target.
Along with risking creating the perception that the Fed is yielding to pressure from the White House, it is also caught between sticky inflation and propping up the weakening job market with rate cuts.
Tension between the White House and the Fed
Trump has been pushing Federal Reserve Chair Jerome Powell, who acts independently of the White House, to cut interest rates for months.
He has tried to and has openly considered firing him.
On Tuesday, Democrats introduced a Senate bill aimed at reinforcing the separation between the White House and the Federal Reserve, just hours after White House official Stephen Miran was sworn in as a Fed governor.
Meanwhile, an appeals court upheld an to participate, despite ongoing efforts by the Trump administration to remove her.
The projections released alongside the rate decision are the first to include estimates extending through the end of 2028, effectively spanning Trump’s full term.
More to follow…
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