The Fed Lowers Rates in an Economic Balancing Act

¹On September 17, 2025, the Federal Reserve's Federal Open Market Committee (FOMC) lowered the target range for the benchmark federal funds rate by one-quarter percentage point.

²The Committee also released economic projections.

Jobs vs. prices

As the nation's central bank.stagflation.

The FOMC typically raises rates.

³As Fed Chair Jerome Powell pointed out.

The employment picture

⁴Until recently, available data suggested.

⁵⁶Despite fewer jobs. This reflects slower growth.

⁷Unemployment is significantly higher.

The inflation picture

⁸The FOMC has established a 2% annual inflation target.

⁹Although these recent increases are moderate.

Effect on other rates

The federal funds rate is the rate at which banks make overnight loans.

A quarter-percentage drop is a small step.

While the macroeconomic picture shows signs.

Projections are based on current conditions.

1–3, 6, 9) Federal Reserve, 20254–5, 7) U.S. Bureau of Labor Statistics, 20258) U.S. Bureau of Economic Analysis, 2025