US News
LAST UPDATE: September 18, 2025
Federal Reserve cuts rates by quarter point and signals more to come
The Fed cut interest rates by 0.25 pp to a target range of 4.00-4.25%, citing concern over a weakening labor market. Most Fed officials expect at least two more cuts this year. (Financial Times)
Insight
The decision marks a shift from inflation-fight back toward supporting employment, showing the Fed is now more concerned about slowing job growth than upside inflation risk. It reflects balancing of dual mandate under mounting economic downside risks.
Fed delivers normal-sized rate cut, sees steady pace of further reductions; Miran dissents
The Fed reduced rates by 0.25 pp (to 4.00-4.25%), its first cut since last December. It projected two more quarter-point cuts this year. New Governor Stephen Miran dissented, favoring a larger 0.50-pp cut. (Reuters)
Insight
The presence of dissent indicates pressure inside the Fed from political appointees to move faster, but most officials remain cautious. The projections suggest ongoing easing but constrained by inflation remaining above target.
US Fed chief says two more rate cuts in 2025 a probability, not certainty
Fed Chair Jerome Powell said a slim majority of Fed officials expect two more rate cuts this year, but stressed that they are not guaranteed; future decisions will depend on economic data and risks.
Insight
The Fed is signaling flexibility rather than commitment, reflecting uncertainty in the economy. This cautious posture helps manage expectations among markets and preserves policy credibility.
Tariffs pass through to consumers has been small, Fed’s Powell says
Powell stated that while some cost increases from tariffs are being passed to consumers, so far the pass-through has been small; many companies in supply chains are bearing the burden.
Insight
This suggests that inflationary pressures from trade policy are being mitigated, at least for now, but there is risk of escalation if firms begin shifting more costs downstream. It underscores the Fed’s need to monitor not just headline inflation but also cost pressures in supply and trade.
Why the Fed’s Cut Isn’t Exciting Markets
The Fed’s recent rate cut of 25 basis points didn’t spark much enthusiasm in the markets. Investors were looking for clearer forward guidance, and persistent inflation concerns tamped down expectations of aggressive easing. (Reuters)
Insight
Market reaction suggests that rate cuts alone are no longer sufficient to move sentiment; clarity around future policy path and inflation trajectory matters. The Fed may need to do more than just adjust rates to rebuild confidence in its forward guidance.
US Mortgage Rates Fall to 2024 Levels, Fueling Refinancing Surge
U.S. 30-year fixed mortgage rates dropped to ~6.39%, the lowest since October 2024, prompting a surge in refinancing applications. Home purchase application demand also rose. (Reuters)
Insight
As mortgage rates fall, homeowners are seizing the opportunity to refinance, which may relieve some burden of high interest costs but also could stimulate housing demand. The trend potentially boosts consumer spending and economic activity, though real estate supply constraints may limit long-term gains.
