The Federal Reserve cut interest rates by 25 basis points on Wednesday to 4.00% to 4.25%, ending a nine-month pause, according to Benzinga. This is the fourth rate cut since the fourth quarter of 2024, with policymakers indicating more reductions may come. The rate cut decision was split, with Trump appointee Stephen Miran favoring a 50-basis-point cut instead of 25. The Fed said job gains have slowed and unemployment has edged up, a downgrade from July’s assessment of “solid” labor conditions. The Fed raised its GDP growth forecast to 1.6% for 2025, 1.8% for 2026, and 1.9% for 2027, signaling a more resilient outlook. The long-run potential growth estimate stayed unchanged at 1.8%. The Fed now sees a quicker pace of cuts, projecting the federal funds rate at 3.6% in 2025, 3.4% in 2026, and 3.1% in 2027.
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