A. M. The US Federal Reserve (FED) announced this wednesday a 0.25 percentage point cut in interest rates, placing the new range between 4% and 4.25%. This is the first downward adjustment since december 2024, in an economic context marked by rising inflation and clear signs of a slowdown in the labor market.
The Federal Open Market Committee (FOMC), chaired by Jerome Powell, made this decision after five consecutive meetings in which rates remained unchanged, justifying the cuts based on a slowdown in economic growth and the recent rise in inflation, which reached 2.9% in august. “Recent indicators suggest that economic growth moderated in the first half of the year. Job creation has slowed, and the unemployment rate has risen slightly, although it remains low. Inflation has risen and remains somewhat elevated”, the entity emphasized in its official statement.
Consensus decision
The decision was not unanimous, as the new FOMC member, Stephen Miran—appointed by President Donald Trump—voted in favor of a more aggressive 50-basis-point cut, pushing for a more expansionary monetary stance. Other members who share this view, such as Michelle Bowman and Christopher Waller, supported the 25-basis-point cut.
The current economic context is marked by a contraction in the labor market and rising inflation, influenced in part by new import taxes and international political and trade tensions. The Federal Reserve assured that it will maintain its balance sheet policy and is “prepared” to make additional adjustments if economic conditions so require, closely monitoring inflation and employment data.
With this new move, the Fed seeks to stimulate the US economy and provide greater certainty at a time of heightened economic and social uncertainty, possibly marking the beginning of a new cycle of cuts in the coming months.
