{"id":53254,"date":"2025-09-17T14:38:57","date_gmt":"2025-09-17T18:38:57","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/federal-reserve-cuts-rates-signals-further-easing-amid-shifting-economic-outlook\/53254\/"},"modified":"2025-09-17T14:38:57","modified_gmt":"2025-09-17T18:38:57","slug":"federal-reserve-cuts-rates-signals-further-easing-amid-shifting-economic-outlook","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/federal-reserve-cuts-rates-signals-further-easing-amid-shifting-economic-outlook\/53254\/","title":{"rendered":"Federal Reserve Cuts Rates, Signals Further Easing Amid Shifting Economic Outlook"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li>The Federal Reserve implemented a <strong>quarter-point interest rate cut<\/strong>, lowering the federal funds rate target range, with market futures now indicating a <strong>94% chance of another cut in October<\/strong>.<\/li>\n<li>Fed policymakers revised their <strong>2025 GDP growth outlook upward to 1.6%<\/strong> from 1.4%, while projecting <strong>2025 unemployment at 4.5%<\/strong> and <strong>PCE inflation at 3.0%<\/strong>.<\/li>\n<li>The median rate outlook for end-2025 was lowered to <strong>3.6%<\/strong> (from 3.9%), implying <strong>50 basis points of additional cuts this year<\/strong> and further easing through 2027.<\/li>\n<li>Equity markets reacted positively, with the <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> (<a href=\"\/stock\/SPX\">SPX<\/a>) extending gains by 0.2%<\/strong> and sectors like Real Estate and Financials seeing significant upticks.<\/li>\n<\/ul>\n<p>The Federal Reserve today delivered a <strong>quarter-point interest rate cut<\/strong>, marking a significant shift in monetary policy as policymakers responded to evolving economic conditions and increased concerns about the labor market. This decision was largely anticipated, with US interest rate futures showing a <strong>94% chance of a Fed rate cut in October<\/strong>, up from 71.6% before the official statement. Traders have increased their bets on at least one more Fed rate cut this year.<\/p>\n<p>In its updated economic projections, the Federal Open Market Committee (FOMC) revealed a more optimistic outlook for economic growth, lifting the <strong>2025 GDP growth forecast to 1.6%<\/strong> from its previous 1.4% projection, with longer-run growth holding steady at 1.8%. However, policymakers also projected <strong>2025 unemployment at 4.5%<\/strong> and <strong>PCE inflation at 3.0%<\/strong>.<\/p>\n<p>The &quot;dot plot&quot; of individual policymakers&#39; expectations indicated a dovish shift, with the median rate outlook for end-2025 lowered to <strong>3.6%<\/strong> from a previous 3.9%. This implies <strong>50 basis points of additional cuts this year<\/strong>, followed by a slower pace of easing through 2027, with the end-2026 outlook at 3.4% (down from 3.6%). US rate futures are now pricing in approximately <strong>69 basis points of cuts in 2025<\/strong> following the Fed statement.<\/p>\n<p>Notably, Fed Governor Miran dissented from the majority, advocating for a <strong>half-point cut<\/strong>, citing increased downside risks to employment. This highlights internal divisions within the central bank regarding the appropriate pace and magnitude of easing.<\/p>\n<p>Equity markets reacted favorably to the news. The <strong>S&amp;P 500 (<a href=\"\/stock\/SPX\">SPX<\/a>) edged up 0.1%<\/strong> immediately after the rate cut announcement, later extending its gains to <strong>0.2%<\/strong>, with the Dow (<a href=\"\/stock\/DJI\">DJI<\/a>) also seeing extended gains. Sector-specific performance was strong, with <strong>S&amp;P 500 Real Estate up 1.4%<\/strong> and <strong>Financials up 1.3%<\/strong> after the Fed statement. The FOMC press conference is scheduled for approximately 19:30 BST.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways The Federal Reserve implemented a quarter-point interest rate cut, lowering the federal funds rate target range, with market [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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