The Fed cuts rates by a quarter point for the second time in 2025

The Federal Reserve (Fed) announced Wednesday the second quarter-point rate cut this year in the face of rising risks in the labor market.

The second cut of the year comes despite the fact that Chairman Jerome Powell had been reluctant to take such a move, despite public urging from President Donald Trump.

The decision to cut the benchmark rate to between 3.75% and 4%, which had been expected by markets, was approved by a vote of ten in favor and two against, the Fed said in a statement.

Opposing the second consecutive rate cut were Stephen Miran, who favored a half-point reduction, and Jeff Schmid, who wanted to keep rates unchanged.

"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months," the Fed explained in a statement.