U.S. Fed makes first rate cut of this year amid employment concerns

The U.S. Federal Reserve on Wednesday decided to lower the target range for the federal funds interest rate by 25 basis points to 4 to 4.25 percent, the first rate cut since December 2024.

The Fed projected the U.S. median unemployment rate would remain at 4.5 percent in 2025, ease to 4.4 percent in 2026, and decline further to 4.3 percent in 2027. Powell also expressed concern that the tariffs put in place by the Trump administration could continue to build on goods prices through the rest of this year and into 2026.