The Federal Reserve has lowered the for the first time this year, dropping the benchmark indicator 25 basis points to a range of 4.00% to 4.25%.
Following three reductions late in 2024, rates remained in the 4.25%–4.50% range throughout much of 2025.
The highly anticipated move comes after government reports showing both more modest inflation pressure and a weaker job market.
While the Fed doesn’t directly control interest rates, it does determine what banks can charge each other when borrowing or lending excess reserves overnight. That, in turn, influences interest rates on everything from car loans to credit cards.
The committee will meet again in October and December, and a majority of economists anticipate at least one more cut…