The Federal Reserve has announced a 25 bps rate cut, lowering the current target range from 4.25%–4.50% to 4.00%–4.25%.

This marks the first rate cut since December 2024, mainly driven by a slowdown in the job market and rising concerns over weaker employment growth.
The Fed has also signaled the possibility of two more rate cuts by the end of the year if economic conditions continue to deteriorate.
Despite the cut, inflation remains elevated, and the Fed’s long-term goal is to bring it back down to the 2% target — a challenging path ahead.

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Current Market Rates:

Federal Funds Target Rate: 4.00% – 4.25%

Inflation Target: ~2%

Current Unemployment Rate: ~4.0

Rate (%)
^
| ________________
| | |
| 4.50 | — — — |
| | \ |
| 4.25 | \ | ← Fed cuts to 4.00–4.25
| | \ |
| 4.00 | — — — |
| | |
| 3.75 |
+------------------------→ Time

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