what will the fed do with interest rates

The Federal Reserve is widely expected to cut interest rates by 0.25 percentage points at its September 2025 meeting, lowering the target range to about 4% to 4.25%. This will be the first rate cut since December 2024 and likely the start of a series of reductions to stimulate the economy, particularly in response to a weakening labor market with minimal job growth and even some job losses recently. Despite inflation still being above the Fed's 2% target and showing signs of rising, concerns about a slowing job market are pushing the Fed toward easing monetary policy to support employment and economic stability. The Fed aims to balance its dual mandate of maximum employment and stable inflation, with some internal debate on the size of the cut, but the consensus favors the quarter-point reduction this month. Further cuts may come in the following months, possibly in October and December, depending on economic conditions. This move is also expected to lower borrowing costs for consumers and businesses over time, which can help the economy but may have mixed effects, including on housing affordability due to increased demand triggered by lower rates.