Summary
The Federal Reserve approved a 25-basis-point rate cut on September 17, 2025 — its first cut of the year — in an 11-to-1 vote. Newly installed Trump appointee Stephen Miran was the sole dissenter, pushing for a 50-bps cut. The post-meeting dot plot signaled two more cuts by year’s end. The decision came amid rising unemployment, stagnant job creation, and a volatile political environment including Trump’s attempt to fire Governor Lisa Cook (blocked by federal courts).
Key Points
- FOMC cut federal funds rate by 25 bps to 4.00%–4.25%; first cut since late 2024
- 11-1 vote: Miran dissented for a half-point cut; Waller and Bowman (both Trump appointees) voted for the quarter-point
- Dot plot: majority of FOMC saw two more cuts by year-end (October and December meetings); terminal rate projection 3.5%–3.75%
- Unemployment rate hit 4.3% in August — highest since October 2021; job creation stagnant
- Job count showed a nearly one-million-job downward revision for the 12-month period through March 2025
- Powell characterized the cut as “risk management” rather than a signal of broad economic weakness
- Courts blocked Trump’s attempt to fire Governor Lisa Cook; she voted for the cut
- One dot in the plot pointed to 1.25 percentage points of additional cuts — likely Miran
- Market pricing at time: 87.5% probability of 50 bps total additional cuts by year-end
Newsletter Angles
- The “risk management” framing is Powell’s attempt to cut without admitting the economy is in trouble — threading the needle between a dovish signal and an inflation credibility hit
- Miran’s dissent on his first meeting establishes him as the Trump-aligned vote on the board — the political pressure on the Fed now has an internal voice
- The Lisa Cook episode is underreported: a sitting president attempted to fire a Fed governor and was blocked by courts. This is a constitutional stress test on Fed independence that happened quietly while the rate-cut headline dominated coverage
- The downward jobs revision (nearly 1 million fewer jobs than initially reported) is a significant data revelation that changed the complexion of the labor market picture — and justified the Fed’s pivot to easing
Entities Mentioned
- Federal Reserve — institution cutting rates
- Jerome Powell — chair; “risk management” framing
- Donald Trump — context: pressure campaign, Cook firing attempt
- 2025 United States Government Shutdown — mentioned as impending context (shutdown started Oct 1, weeks after this cut)
Concepts Mentioned
- Fed Independence — Cook firing attempt and Miran appointment both test it
- Stagflation — “job gains have slowed” + inflation “moved up and remains somewhat elevated” — dual mandate tension
- Tariff-Driven Inflation — backdrop for the Fed’s delayed cutting cycle
Quotes
“The marked slowing in both the supply of and demand for workers is unusual in this less dynamic and somewhat softer labor market. The downside risks to employment appear to have risen.” — Jerome Powell
“A majority of the FOMC is now targeting two further cuts this year, indicating that the doves on the committee are now in the driver’s seat.” — Simon Dangoor, Goldman Sachs Asset Management
Notes
CNBC coverage by Jeff Cox, a reliable beat reporter for Fed coverage. Source covers the September 17, 2025 FOMC meeting. The Miran dissent and Cook court battle are the two political subplots that make this more than a routine rate decision. The “nearly a million fewer jobs” BLS revision is a significant data point buried in the article.