The Federal Reserve cut interest rates by 0.25 percentage points (25 basis points) on September 17, 2025. This cut lowered the federal funds rate to a range between 4.00% and 4.25%, down from the prior range of 4.25% to 4.5%.
This was the Fed's first rate cut since December 2024, made in response to signs of a weakening labor market and slower economic growth. The Fed also signaled plans for two additional rate cuts later in the year to further ease borrowing costs.
The decision was mostly supported by Fed officials, with one dissenting member advocating for a larger 0.5 percentage point cut.
In summary, the interest rates were cut by 0.25 percentage points, setting the new target range at 4.00% to 4.25% as of mid-September 2025.
