Heads up, #MoneySquad! On Wednesday, the Fed cut the federal funds rate by 25 basis points the first since December 2024 lowering it to 4.004.25%. ✂️💸
Why now? Economic growth cooled in early 2025, job gains slowed, and while unemployment crept up a bit, it remains low. Inflation? Still above the 2% goal, but the Feds FOMC said theyll "carefully assess incoming data" before deciding on next steps.
By the numbers:
- Vote: 11-1 in favor (Stephen Miran wanted a 50-bps drop)
- New Fed forecasts: GDP growth at 1.6% in 2025 (vs. 1.4% in June), climbing to 1.9% by 2027
- Unemployment projected to ease from 4.5% in 2025 to 4.3% in 2027 📊✨
Behind the scene drama: A federal appeals court blocked President Trumps bid to remove Fed governor Lisa Cook just days before the meeting. Then the Senate confirmed Stephen Miran to fill the board seat until early 2026.
What this means for you: Lower rates can translate to cheaper loans think easier cash flow for startups, mortgages, or student loans. But keep one eye on inflation to see if price tags keep rising. 🔍📈
All in all, its a balancing act the Feds tweaking settings to support jobs and hit that 2% inflation target. Stay tuned, and lets see how this rate move levels up (or levels out) your financial game! 🚀💼
Reference(s):
cgtn.com
