Federal Reserve Cuts Rates by a Quarter Point
The Federal Reserve recently reduced the benchmark interest rate by a quarter point and is also forecasting two more quarter-point reductions this year. The reduction is the first time the rate-setting Federal Open Market Committee (FOMC) reduced borrowing costs in 2025.
The reduction takes the federal funds rate, the interest rate banks charge each other for short-term loans, to a target range of 4%-4.25%.
In a median projection, officials estimated the federal funds rate will be reduced to 3.6% by the end of 2025, a 0.3 percentage point lower than their June projection.
Fed Governor Stephen Miran cast a dissenting vote, favoring a half-point reduction.