Fed Begins Easing: Cuts 25 bps to 4.00–4.25%

The FOMC cut its federal funds rate by 25 basis points to 4.00–4.25%, beginning the 2025 easing cycle after holding rates since December 2024. The September SEP projected GDP at 1.6% for 2025, unemployment at 4.5%, and PCE at 3.0%. One member dissented in favor of a larger 50 bps cut. The move reflected the Fed's judgment that the balance of risks had shifted toward the employment mandate.