Federal Reserve cuts interest rates by 25bps, finally giving Trump what he wants

The Federal Reserve chair wrapped up Wednesday’s press conference the same way he always does; tight-lipped on politics.

As Cryptopolitan previously reported, journalists have tried again and again to get him to comment on pressure from Trump’s administration, and once again, Jerome Powell refused to bite.

He shut down questions about criticism from Treasury Secretary Scott Bessent, who recently accused the Fed of “mission creep” and called for an independent audit.

Powell’s answer? “I, of course, I’m not going to comment on anything the Secretary says or really any other officer says.”

He didn’t budge on personal plans either. When asked about whether he might step down when his term ends in May, Powell said, “I have nothing new on that for you today.”

Even when asked about Trump’s push to remove Lisa Cook from the board, he didn’t flinch. “You know, I see it as a court case that it would be inappropriate for me to kind of comment on,” he said. Business as usual. Powell walked out without giving them anything new.

And just like that, the press conference for September is over.

This post is updated LIVE.

The rate cut didn’t go unnoticed in crypto. Bitcoin sank after the announcement, extending earlier losses. At press time, it was down 1.1%, trading at $115.7K, and Ether is down 0.3% to $4.49K.

Over $105 million in crypto positions got liquidated within 30 minutes. And the US Dollar fell to its weakest level since February 2022.

Bitcoin’s reaction matters even to people who don’t touch crypto. It’s closely linked to risk sentiment and tracks the S&P 500 more often than not.

When Bitcoin topped in January, the S&P held its highs for a bit longer before following it lower. Both bottomed in April. Now the roles have flipped, with the S&P 500 is rising again while BTC lags. But that divergence won’t last.

Either equities stall out, or Bitcoin catches up. Bulls are watching a possible inverse head and shoulders pattern forming just below $117K.

If it plays out, the target is $127.6K, clearing the August all-time high, with $142K as the next breakout level.

Technically, Bitcoin is still holding its long-term uptrend from late 2022, even as it trades inside a downsloping channel. It’s broken out of five similar setups before.

But this time, RSI momentum hasn’t followed through. For Bitcoin to take off again, weekly RSI has to punch above 70, like it did during the 130% rally in late 2023 and the 50% move in early 2024.

Until that happens, traders are cautious. But it’s Q4, and historically, Bitcoin likes this season. If the pattern plays out, it could be risk-on across both crypto and equities again.

Jerome Powell was pushed again on whether the Federal Reserve can stay neutral with political pressure building ahead of the election.

His answer was: the Fed does not care about politics. “It’s deeply in our culture to do our work based on the incoming data and never consider anything else,” he said.

Powell insisted that every decision the committee makes is driven by economic conditions, not campaign noise.

He said the Fed doesn’t even frame policy in political terms. “We don’t frame these questions at all or see them in terms of political outcomes,” Powell said.

“I think when you get to another part of Washington, everything is seen through the lens of ‘does it help or hurt this political party, this politician?’ … And I think people find it hard to believe—that’s just not at all the way we think about things at the Fed.”

Powell added that the central bank is having real, tough debates internally, but they’re all rooted in data and the long-term health of the economy.

https://www.youtube.com/watch?v=oQ246jra6cM

“We’re doing our work exactly as we always have now,” Powell said. “And people are… making their arguments. And we’re having a really great discussion around these challenging issues.”

This post is updated LIVE.

When asked if a bigger rate cut was on the table, Powell shut it down fast. “There wasn’t widespread support at all for a 50-basis-point cut today,” Powell told reporters at the press conference.

He pointed out that in recent years, the Fed has only made big swings, either hikes or cuts, when policy was totally out of step with the economic reality.

“We’ve done very large rate hikes and very large rate cuts in the last five years,” Powell said, “and you tend to do those at a time when you feel that policy is out of place and needs to move quickly to a new place.”

That’s not the situation today, at least not in the Fed’s view. The central bank is making adjustments, not throwing out the playbook.

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Powell also said the threat of runaway inflation has cooled off a bit. “Since April, to me, the risks of higher and more persistent inflation have probably become a little less,” he said.

He pointed to a weaker labor market and slower GDP growth as signs that pressure is easing.

Still, tariffs are pushing prices higher in some sectors, but Powell repeated his view that the spike may be a one-time jump rather than a sustained inflationary cycle.

“It increasingly looks like it will be a one-time price increase, as opposed to creating an inflationary process,” he said.

This post is updated LIVE.

Pressed by reporters about whether the recent job slowdown could be blamed more on tariffs than on inflation, Powell said both may be playing a role.

“We have begun to see goods prices showing through into higher inflation,” he said. He claimed that rising goods prices account for most, “perhaps all,” of the inflation this year.

But on the jobs front, Powell leaned toward immigration as the bigger issue. “The supply of workers has obviously come way down,” he said. “There’s very little growth, if any, in the supply of workers. And at the same time, demand for workers has also come down quite sharply.”

This post is updated LIVE.

Powell addressed the tariff policies introduced by Trump earlier this year. He said the economic effects are still unclear. “Changes to government policies continue to evolve, and their effects on the economy remain uncertain,” Powell said.

He added that higher import taxes have already pushed up prices in some sectors, but the overall impact on inflation and growth is still being evaluated.

Powell explained that a one-time price shift is the base case, but admitted that more persistent inflation from tariffs is still possible. “That is a risk to be assessed and managed,” he said.

When asked directly whether Stephen Miran’s appointment, Trump’s top economic advisor, to the Fed board compromises the bank’s independence, Powell said the committee welcomed its new member like any other.

He made it clear that the Fed remains focused on its dual mandate and will not bow to political pressure. “We’re strongly committed to maintaining our independence,” Powell said. “And beyond that, I really don’t have anything to share.”

This post is updated LIVE.

The labor market, Powell said, is losing strength. Powell cited a 4.3% unemployment rate in August, which he described as “little changed” year-on-year but noted that the pace of job creation is now falling short of what’s needed to keep that number stable. He said the demand for workers is cooling.

“Labor demand has softened,” he said. “The recent pace of job creation appears to be running below the breakeven rate needed to hold the unemployment rate constant.”

Read Chair Powell’s full opening statement from the #FOMC press conference (PDF): https://t.co/r9POqOXtAx pic.twitter.com/XrfibjpeAi

— Federal Reserve (@federalreserve) September 17, 2025

Powell also said this trend was “unusual,” because it reflects a slowdown on both the supply and demand side of the labor market.

According to the Fed chair, lower immigration and weaker labor force participation are part of the problem. There simply aren’t as many new workers entering the system.

This post is updated LIVE.

Jerome Powell opened his post-meeting press conference by repeating what was already in the Federal Reserve’s policy statement. He confirmed what the data had been signaling for months: the U.S. economy is slowing. Powell said:

“While the unemployment rate remains low, it has edged up. Job gains have slowed and downside risks to employment have risen.”

He acknowledged that inflation has also moved higher again and is still sitting “somewhat elevated.”

Powell described the slowdown in GDP growth as sharp, pointing out that output grew at just 1.5% in the first half of 2025, compared to 2.5% in the same period last year. He said much of that drop was due to weaker consumer spending.

This post is updated LIVE.

Right after the Federal Reserve announced its first rate cut since December, the markets got whiplash. The S&P 500 barely moved, up just 0.1%, while the Nasdaq slid 0.3% as tech names took a hit.

The Dow had a stronger day, up 410 points, or 0.9%, mostly thanks to a bump in consumer stocks. The Fed also laid out its game plan for the rest of 2025: two more cuts on the way. That gave traders something new to price in fast.

But tech didn’t take it well. Nvidia dropped over 2% after a Financial Times report said China banned local tech firms from buying its chips. Amazon, Alphabet, and Palantir all traded lower, dragging the Nasdaq down with them.

Meanwhile, Walmart popped 2%, lifting the Dow, as hopes grew that falling rates might ease pressure on shoppers. For now, Wall Street is trying to figure out if this is a soft landing, or just the Fed blinking first.

This post is updated LIVE.

The central bank says it’s still focused on its dual mandate, maximum employment and 2% inflation over time. But now, they admit that downside risks to jobs are going up. That’s new.

So what exactly did they do? The Federal Reserve voted to cut the federal funds rate by a quarter-point, shifting the range to 4.00% to 4.25%. They’re not done either. Officials said they’ll keep assessing new data and can tweak rates again if needed.

“In considering additional adjustments to the target range,” the Fed said, “the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.” That means more cuts could come, but nothing’s promised.

At the same time, the Fed said it will “continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.” So even with the rate cut, they’re still tightening by shrinking the balance sheet.

They also repeated their “strong commitment” to hitting that 2% inflation target. But the tone has changed. They’re now clearly worried about employment. That wasn’t as clear before.

The Fed also said it would watch everything: job market data, inflation signals, inflation expectations, international events, and financial conditions.

If any of those go south, they’ll consider changing policy again. “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.”

This post is updated LIVE.

Federal Reserve admits that economic growth is cooling. The labor market, which has been the golden child of the post-pandemic recovery, is losing steam. Job gains are slowing down, and the unemployment rate has crept up, though it’s still low by historical standards.

Meanwhile, inflation has jumped again, staying above what’s comfortable for the Fed. And when you mix that with rising global tension, shaky consumer sentiment, and tightening credit, the Fed had little choice but to shift gears.

This post is updated LIVE.