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The Federal Open Market Committee lowered its interest rate target range by 25 basis points to 4.00%–4.25% at its September meeting. In a change to its previous statement, the FOMC noted that job gains have slowed, and the unemployment rate has edged up. At the same time, inflation has moved up. Nonetheless, the committee judged that downside risks to employment have risen, which has shifted the balance of risks and provided support for the decision to lower its interest rate target. One FOMC member, Stephen Miran, dissented, desiring to lower the target range by 50 basis points.

In the press conference following the meeting, Federal Reserve Chairman Jerome Powell noted that job gains have slowed significantly, likely due to both lower immigration and lower labor force participation. Chairman Powell also noted that in recent months, goods inflation has picked up due to tariffs, while it has moved down for services.

The FOMC’s summary of economic projections, which maps out the Federal Reserve’s expectations for where interest rates may be headed in the future, signaled a more dovish stance than the June summary. Six Federal Reserve officials project there will be no additional rate cuts in 2025, while nine anticipate an additional 50 basis points worth of cuts in 2025. Furthermore, the projections show that officials expect inflation to remain elevated for longer than they expected in June. On the other hand, the projections show officials expect real GDP to rise more in 2025 than previously anticipated.