The Federal Reserve cut its benchmark interest rate by a quarter point on Wednesday, September 17, 2025, lowering the federal funds rate to a range of 4.00% to 4.25%. The cut marks the first reduction in the interest rate since December 2024 and is primarily driven by concerns over a weakening job market, with hiring slowing and unemployment rising. Federal Reserve Chair Jerome Powell announced the rate cut during a news conference on Wednesday. Borrowers will likely see lower interest rates within weeks, as these are tied directly to the prime rate, which moves with the federal funds rate. Wednesday’s quarter-percent rate cut followed months of pressure from President Trump for the central bank to lower borrowing costs.