Federal Reserve cuts interest rates a quarter point as US job market wobbles

The Federal Reserve on Wednesday cut interest rates by a quarter point – delivering highly-anticipated relief to borrowers for the first time since December 2024.

Central bankers have been delaying rate cuts over fears that tariffs could reheat inflation, which did pick up over the summer, and recent economic data have delivered a mixed bag of results.

But during his Jackson Hole speech last month, Fed Chairman Jerome Powell signaled that the weakening labor market is now a greater concern than inflation – especially since tariffs might only introduce a one-time price impact.

Now the question is whether Americans can expect a consecutive rate cut at the Fed’s October meeting. In June, officials had predicted two interest rate cuts this year.

Meanwhile, President Trump has ramped up his pressure campaign on the Fed to cut rates for months. The attacks have turned personal, most recently slamming Powell as “incompetent” on Sunday. 

Minutes before the Fed’s two-day meeting started on Tuesday, Stephen Miran – who most recently served as Trump’s economic adviser – was sworn in as the newest member of the Fed.

Fed governor Lisa Cook, who the Trump administration has attempted to oust over accusations of mortgage fraud, also voted on Wednesday’s decision.

This is a developing story. Please refresh for updates.