[VT | Philadelphia | Sept. 17, 2025] The U.S. Federal Reserve announced on September 17, 2025, that it would lower the target range for the federal funds rate by ¼ percentage point to 4.00%-4.25%. The press conference, originally scheduled for 2:00 p.m. EDT, was held at 2:30 p.m., a slight delay, while the statement was released on time. Industry observers noted that such short delays may be related to statement wording, data verification, and internal coordination to ensure accuracy and consistency of information.
The statement indicated that economic activity growth had moderated recently, job gains had slowed, and the unemployment rate had edged up slightly but remained low. Inflation has increased and remains somewhat elevated. The Fed said it continues to monitor uncertainty in the economic outlook and risks to its dual mandate, particularly noting rising downside risks to employment.
In terms of operations, the Fed announced:
- • Lowered the interest rate paid on reserve balances to 4.15%, effective September 18.
- • Lowered the primary credit rate to 4.25%, effective September 18.
- • Maintained standing overnight repo operations with a minimum bid rate of 4.25% and an aggregate limit of $500 billion.
- • Maintained standing overnight reverse repo operations at 4.00% with a per-counterparty limit of $160 billion.
- • Continued reducing its holdings of Treasury securities, agency debt, and agency MBS, including through reinvestments according to set caps.
The Fed reiterated that it will continue to monitor labor market conditions, inflation pressures and expectations, as well as financial and international developments, and will adjust monetary policy as appropriate to support maximum employment and achieve the long-run 2% inflation target.
In the policy vote, 11 members including Jerome Powell and John C. Williams supported the quarter-point rate cut, while Stephen I. Miran preferred a half-point reduction.
