The Federal Reserve reduced its reference interest rate a quarter of a percentage point on Wednesday, opting for its first reduction of interest rates this year in an effort to relive the marking labor market.
The Central Bank delivered a policy so long sought by President Donald Trump, although the size of the rate reduces everything, but certainly did not reach Trump’s desired result. The Federal Open Market Committee (FOMC), a policy formulation agency in the Fed, projected two additional cutting -foothills cuts in the rest of the year.
Five meetings and nine months have passed since the FED reduced interest rates. The federal fund rate represents between 4% and 4.25%, preserving much of a strong increase imposed in response to an episode of inflation of the pandemic era.
The Fed is guided by a double mandate to maintain inflation under control and maximize employment. In a statement on Wednesday, FOMC indicated a greater concern about slowing the growth of employment than for increasing inflation.
“The Committee is attentive to the risks for both sides of its double mandate and judges that the downward risks for employment have increased,” the FOMC said.
The high -risk announcement marks an inflammation point in the pressure campaign of the months addressed to the Fed by Trump.
In recent weeks, Trump moved to say goodbye to a member of the Board of Governors of the Fed and ensure the confirmation of the Senate for another. Both officials were on their way to being among the 12 policy formulators who cast votes on the interest rate decision, although their status remained uncertain days before the Fed meeting.
Stephen Miran, an economic advisor from the White House who joined the Fed Board this week, the lonely dissident vote issued. Look voted in favor of a higher semicircular fees cut.
The race to remodel to the Fed occurs after Trump criticized months against the Central Bank and its president Jerome Powell for rejecting attention to his call to lower interest rates. In July, Powell emphasized the importance of political independence, saying that it allows central bankers to make “very challenging decisions” based on “data.”
In a publication on social networks on Monday, Trump reiterated his criticism to Powell, saying that the president of the FED “must reduce interest rates, now, and larger than he had in mind.”
In recent months, the economy has suffered a strong deceleration of hiring together with an increase in inflation, establishing the conditions of what economists call “stagflation.”
Economic conditions have put policy formulators fed in a link. If the Fed increases interest rates as a means to protect against inflation induced by the rate, run the risk of bowing to the economy in a recession. On the other hand, if the Fed reduces rates to stimulate the economy in the face of a procurement of hiring, threatens to increase spending and worsen inflation.
Last month, Powell said the Central Bank faces a “challenging situation”, exercising pressure on both sides of the double mission of the Fed to maximize employment and control inflation.
Even so, Powell said, the “risk balance seems to be changing” in the light of a deceleration of hiring made it clear in a weak job report earlier this year that included acute reviews of work profits in recent months.
Donald Trump indicates an cost sheet while talking with the president of the Federal Reserve Jerome Powell (R) while visiting the Federal Reserve in Washington, DC, on July 24, 2025.
Andrew Caballero-Reynolds/AFP through Getty Images
Recently, Trump moved to the member of the Fire Board, Lisa Cook, who sued Trump for her attempt to expulsion, saying that the decision violated her legal protections as an employee of the independent federal agency. Trump said he eliminated Cook for accusations of mortgage fraud against him.
The Federal Law allows the President to eliminate a member of the Fed Board “for Cause”, although no president has tried such elimination in the 112 years of history of the Central Bank.
Last week, a federal judge issued a preliminary court order that required that the Fed allows Cook to continue serving in his role as governor of the Federal Reserve system as his lawsuit moves through the courts.
Days later, the Trump administration filed an application before an appeals court asking to withdraw Cook on Monday, before the programmed vote on interest rates. That day, an appeals court rejected Trump’s offer, clearing the way for Cook to vote at the Fed. Trump meeting can appeal the ruling before the Supreme Court.
Last month, Trump asked Cook to resign the same day that Bill Abute, the director of the Federal Housing Finance Agency, published in part of a letter of August 15 sent to the United States Attorney General Pam Bondi accusing Cook of falsifying bank documents and properties records to acquire more favorable loan terms, “potentially committing mortuvios, the established letter.”
In a statement provided to ABC News at that time, Cook said he learned of the media about the pulte letter in search of a criminal reference on the mortgage application, which preceded his time with the Federal Reserve.
“I have no intention of being intimidated to give up my position due to some questions raised in a tweet,” Cook said in the statement last week. “I intend to take any question about my financial history as a member of the Federal Reserve, so I am collecting the precise information to answer any legitimate question and provide the facts.”
The Senate voted 48-47 on Monday to confirm the nomination of the economic advisor of the White House Stephen look to serve as a member of the Board of Governors of the Federal Reserve, racing the way for them to look at a vote on the interest rates.
Miran has promised to safeguard the independence of the Central Bank, but said earlier this month that it does not plan to give up its position within the Trump administration. Look is filling a vacancy created by the early retirement of the member of the Fed Board, Adrianna Kugler, whose term would end in January.
Miran said he plans to take an unpaid absence permit of his current role. Miran made the decision after “lawyer advice”, since his mandate at the Fed Board would last four months, they said at a Senate hearing this month.
