US lowers key rate for the first time in 9 months: causes and consequences
Kyiv • UNN
The US Federal Reserve lowered its key rate by 25 basis points to 4.0-4.25% for the first time in 2025. This decision, which followed a weakening labor market, caused euphoria in US stock markets.
The US Federal Reserve (Fed) has lowered its key interest rate for the first time in 2025. This was reported by DW, informs UNN.
Details
It is noted that the Fed lowered the key interest rate by 25 basis points for the first time in nine months to 4.0-4.25 percent.
Many analysts expected such a move - after a noticeable weakening of the US labor market. This decision caused euphoria in the US stock markets
It is indicated that due to the rate cut, the Fed expects GDP growth of 1.6 percent against the previous forecast of 1.4 percent. The inflation forecast remains at 3 percent.
Rate cuts help balance growing risks in the labor market and inflation. Lower rates make loans cheaper for companies and consumers, which stimulates the economy and promotes job creation. US President Donald Trump has demanded a reduction in the interest rate since the beginning of his second presidential term
The media reminds that in April, the head of the White House stated that he could remove Fed Chairman Jerome Powell, which caused a fall in the country's main stock markets. In August, Trump announced the dismissal of Fed Board of Governors member Lisa Cook, accusing her of falsification. The president's decision was overturned by the US Court of Appeals.
Recall
Last week, the National Bank of Ukraine again decided to leave the key interest rate unchanged. It remains at 15.5%.