The widely expected cut of a quarter percentage point comes amid economic pressures ranging inflation and tariffs to sluggish job growth. All eyes are on whether more cuts are expected in the near future.The US Federal Reserve , commonly known as the Fed, lowered its benchmark rate Wednesday by a quarter percentage point, the first such cut since last year.

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The Fed paused its easing cycle in January due to uncertainty over how President Donald Trump's import tariffs might affect inflation and the overall economy.

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Markets expect more cuts during Fed meetings in October and December, despite inflation hovering above the Fed's 2% target.

Along with risking creating the perception that the Fed is yielding to pressure from the White House, it is also caught between sticky inflation and propping up the weakening job market with rate cuts.

Tension between the White House and the Fed

Trump has been pushing Federal Reserve Chair Jerome Powell, who acts independently of the White House, to cut interest rates for months.

He has tried to pressure Powell to resign and has openly considered firing him.

On Tuesday, Democrats introduced a Senate bill aimed at reinforcing the separation between the White House and the Federal Reserve, just hours after White House official Stephen Miran was sworn in as a Fed governor.

Meanwhile, an appeals court upheld an injunction allowing Governor Lisa Cook to participate, despite ongoing efforts by the Trump administration to remove her.

The projections released alongside the rate decision are the first to include estimates extending through the end of 2028, effectively spanning Trump's full term.

More to follow...

(The above story first appeared on LatestLY on Sep 17, 2025 11:40 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).