US NY Fed GDPNowcast Q3: 2.10% (prev 2.08%)

US NY Fed GDPNowcast Q3: 2.10% (prev 2.08%)

The US Federal Reserve has made its first interest rate cut of the year, reducing the benchmark rate by 0.25 percentage points to a target range of 4% to 4.25%. This move, approved during the Fed's two-day policy meeting on Wednesday, comes after sustained pressure from President Donald Trump and follows concerns about the economy expressed by Fed Chair Jerome Powell .

Powell highlighted that while the unemployment rate remains low, job gains have slowed and downside risks to employment have increased. He also acknowledged the impact of Trump's tariffs, noting that they have started to push up prices but their overall effect remains uncertain. The Fed's dot chart indicates that nearly half of its policymakers expect two more rate cuts this year if the reduction is set at 0.25 percentage points.

Separately, the New York Federal Reserve's GDPNowcast for the third quarter of 2025 has been revised to 2.10%, up from the previous estimate of 2.08%. This suggests a slight uptick in economic activity, although it remains below the 2.5% average growth rate seen in the first two quarters of the year .

The Federal Reserve's decision to cut rates is a response to economic headwinds, including the potential impact of tariffs and a slowing job market. Investors and financial professionals should closely monitor the economic data and the Fed's future policy moves to gauge the direction of the economy and interest rates.