The Federal Reserve lowered the federal funds rate target range by 0.25 percentage points, to a policy range of 4.00–4.25 percent. Policymakers emphasized they will monitor incoming data and adjust policy as needed, while continuing to reduce holdings of Treasuries and mortgage-backed securities. Most members supported the move, though one dissented, preferring a cut of 0.50 basis points.
During a press conference addressing the rate cut, Federal Reserve Chair Jerome Powell said the Fed is trying to balance two goals: keeping prices stable and supporting employment. “When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate,” he explained. Powell noted that inflation remains too high, with tariffs pushing prices up. “The effects of tariffs on consumer prices are now clearly visible. We expect those effects to accumulate over coming months,” he said.
At the same time, the job market is weakening. “A hiring
