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US Federal Reserve rate cut today Sept 17: Official announcement at 2 p.m. ET

Federal Reserve is widely expected to announce its first interest rate cut of 2025 today, September 17. The consensus among market participants and economists is for a quarter percentage point (25 basis points) reduction, bringing the federal funds rate to a range of about 4.00% to 4.25%. This would be the first cut since December 2024 and reflects concerns over a weakening labor market, signs of slower job growth, and some inflationary pressures from tariffs.This rate cut is seen as a move to support the struggling labor market amid ongoing economic uncertainties. The Fed’s decision is also influenced by political pressure from President Trump, who has been urging for lower borrowing costs. While a 25 basis point cut is almost certain, there is little expectation of a larger 50 basis point cut at this moment.The Fed’s announcement today will also be watched closely for guidance on the likelihood of further rate cuts in the upcoming Fed meetings scheduled for late October and December 2025. The overall outlook suggests the possibility of additional gradual easing if economic conditions warrant it.What time will the Fed announcement be released todayThe Federal Reserve’s interest rate decision announcement is scheduled to be released today, September 17, at 2 p.m. Eastern Time (ET). That release will include the rate decision and the Fed’s updated Summary of Economic Projections, which outline the outlook for growth, inflation, and unemployment.Live EventsFollowing the announcement, Fed Chair Jerome Powell is expected to hold a press conference at 2:30 p.m. ET to discuss the decision and answer questions from the media.What will the Fed’s statement likely say about ratesThe Federal Reserve’s statement today is likely to announce a quarter percentage point (25 basis points) rate cut, lowering the federal funds rate target range from approximately 4.25%-4.5% to 4.0%-4.25%. This move is expected as a response to signs of a weakening labor market, with slow job growth and rising inflation pressures, partly due to tariffs. The statement will likely emphasize the Fed’s dual mandate to foster maximum employment and stable prices, mentioning that the balance of risks is shifting towards supporting the labor market amid elevated inflation challenges.The Fed may also acknowledge the tension between controlling inflation and promoting employment, signaling a cautious but necessary policy adjustment. While the statement may not promise large cuts, it will likely leave the door open for further gradual easing depending on economic data, especially labor market developments. The announcement might also reflect some internal dissent among policymakers, with a few possibly favoring either no cut or a larger cut. Overall, the tone is expected to be careful, balancing the need to support growth while remaining watchful of inflation trends.What does a 25 bp cut mean for mortgage and loan ratesA 25 basis points (bp) cut by the Federal Reserve generally means a modest reduction in borrowing costs, which can positively impact mortgage and loan rates. For mortgage borrowers, especially those with floating or adjustable-rate loans, this cut can lead to lower monthly payments and reduced EMIs as lenders pass on the reduced borrowing costs. However, the effect on fixed mortgage rates might be less immediate or significant since mortgage rates are influenced not only by the Fed’s short-term rates but also by long-term factors like Treasury yields, inflation expectations, and overall economic conditions.In practice, a 25 bp cut can bring some relief to homebuyers and borrowers by pushing mortgage rates slightly lower, but the market usually prices in such moves well in advance, so the rate drop is often gradual. Loan products like credit cards, auto loans, and personal loans may also see cheaper interest rates, making borrowing less expensive for consumers. The extent of benefit depends on how quickly banks transmit the rate cuts to customers and whether inflation remains in check. Borrowers with high-rate mortgages could consider refinancing to take advantage of lower rates enabled by the cut.How Fed rate cut impacted stock marketThe Federal Reserve’s anticipated 25 basis point rate cut in September 2025 has generally been viewed positively by the stock market, at least initially. Markets had been eagerly awaiting the Fed to resume its rate-cutting cycle amid concerns over a cooling labor market and stubborn inflation. A 25 bp cut is expected to provide a modest boost to stocks, with analysts forecasting roughly a 1% immediate gain in the S&P 500 after the announcement, driven by the easing of borrowing costs and improved investor sentiment.However, this initial uplift could be followed by increased volatility. Some analysts warn that once the cut is priced in, the market might experience a “sell-the-news” reaction as investors reassess the broader economic outlook, potential Fed future actions, and market positioning. This could lead to a short-term pullback of up to 5%, but also create buying opportunities in sectors like technology, utilities, healthcare, and biotech.Which sectors gained most after the Fed cutThe sectors that gained the most after the recent Fed rate cut include:Small-cap stocks: These stocks benefited significantly from the rate cut, as smaller companies are more sensitive to borrowing costs. Lower rates reduce their cost of capital and help with debt refinancing, boosting their growth prospects and stock performance.Financials: Banks and financial stocks rallied because the rate cut encourages more lending activity. While lower rates reduce net interest margins, they can increase loan demand, refinancing, and overall credit growth, which benefits the sector.Real estate: Real estate stocks, including homebuilders and REITs, saw gains as mortgage rates tend to ease following Fed cuts, improving housing market sentiment and demand.Other sectors with notable gains include utilities, which often act as bond substitutes due to stable earnings, consumer discretionary stocks benefiting from higher consumer spending powered by lower borrowing costs, and technology stocks, which remain sensitive to financing conditions.How did bond yields move the day of the cutOn the day of the Fed’s 25 basis points rate cut, U.S. bond yields moved as investors anticipated the easing and repositioned their portfolios. The yield on the 10-year Treasury bond fell slightly by about 1.5 basis points to 4.01%, reflecting increased demand for longer-term government debt. The 2-year Treasury yields, which are more sensitive to Fed rate changes, hovered around 3.50%. Longer maturity bonds, such as the 30-year Treasuries, also saw a modest decline of about 2 basis points, signaling a general easing in borrowing costs across the yield curve.The last Federal Reserve rate cut before today was in December 2024, when the Fed reduced the federal funds rate by 25 basis points, marking the first cut since late 2022. This cut lowered the rate to its lowest point since then, responding to economic signals that indicated a cooling labor market and ongoing inflation risks. Since that time, inflation had shown some stubbornness, rising to 2.9% year-over-year by August 2025, above the Fed’s 2% target, but employment indicators had weakened, with job growth slowing or even shrinking in some months.The December 2024 rate cut aimed to balance these dual pressures—curbing inflation while supporting employment—and set a precedent for potential further cuts this year. The current expected 25 basis point cut on September 17, 2025, is part of a series of expected easing measures to stimulate a softer labor market and address economic uncertainties, reflecting the Fed’s cautious but responsive monetary policy stance amid political and economic pressures, including calls from President Trump for more aggressive rate reductions.Add as a Reliable and Trusted News Source Add Now!
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