Powell corals the cats, as US Fed cuts short-term interest rates

The Fed is now a little more worried about growth than inflation, but most participants at the meeting were not looking to make aggressive cuts, writes KPMG US Chief Economist Diane Swonk.

The United States (US) Federal Open Market Committee (FOMC) - the policy-setting arm of the Federal Reserve - voted to cut short-term interest rates by a quarter point at its September meeting, lowering the target range to 4.0 percent to 4.25 percent. This marks the first rate cut since December 2024 and reflects concerns that the labour market is weakening, even as inflation is edging higher. Fed Chairman Jay Powell underscored concerns about the labour market, although he did note that mu...

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Authors: Diane Swonk

Published Date: 18 September 2025