08.10.202518:14:04UTC+00Fed Flags Job Market Risks, Stays Cautious on Inflation

In the September 2025 FOMC meeting, the majority of Federal Reserve officials agreed that adjusting the federal funds rate target towards a more neutral position was justified. They noted an increase in downside risks to employment, while the threats of rising inflation had either diminished or remained stable. Despite this, many officials continued to express concern over potential inflationary pressures. The meeting minutes revealed that most participants believed further policy easing might be necessary throughout the year, with about half of the officials expecting two more interest rate reductions by the end of 2025. The officials highlighted the importance of considering both inflation and employment risks in deciding future actions. In September, the Federal Reserve reduced the federal funds rate by 25 basis points, setting it within the 4.00%–4.25% range, which aligned with market expectations. This marked the first decrease in borrowing costs since December.