The US Federal Reserve has lowered its key interest rate for the first time in nine months

Regulators predict two more rate cuts this year

On September 17, the US Federal Reserve (Fed) lowered the federal funds rate. It was cut by 25 basis points (bps) to 4-4.25% per annum. This was announced in a statement by the Federal Open Market Committee (FOMC).

This move was in line with analysts’ and market expectations.

“Recent indicators suggest that growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated,” the statement said.

Fed officials are forecasting two more rate cuts this year.

The regulator confirmed its inflation forecast (PCE index) for the United States for the current year at 3% and raised it for 2026 to 2.6% from 2.4%.

The Fed also improved its GDP growth expectations for 2025 to 1.6% from 1.4% and for 2026 to 1.8% from 1.6%.

Fed Chairman Jerome Powell said at a press conference, according to the BBC, that US President Donald Trump’s tariffs are beginning to drive up some prices, but the overall impact on economic activity and inflation remains to be seen.

On September 11, the European Central Bank kept key interest rates at their current levels for the second time in a row. The deposit rate is 2% per annum, the main refinancing rate is 2.15%, and the marginal lending rate is 2.4%. This decision is in line with market forecasts.