The Fed report

highlights from The FOMC Policy Update
SEPTEMBER 18, 2025

This week, the Federal Open Market Committee (FOMC) released its statement and held a press conference following the conclusion of its September meeting.

FOMC Policy Updates: Key Highlights

  • As widely expected by market participants, the FOMC lowered the target range for the federal funds rate by 25 basis points to 4.00-4.25% in its first interest rate cut since December 2024.
  • The decision was not unanimous, as Stephen Miran, who was sworn in as a member of the Board of Governors the day the FOMC meeting began, voted to lower the target range by 50 basis points.
  • The updated dot plot in the quarterly Summary of Economic Projections (SEP) shows a median expectation of two additional quarter-point rate cuts in 2025, which is one incremental cut relative to the June SEP, and one quarter-point rate cut in each of 2026 and 2027.

notable commentary

  • Relative to recent FOMC statements, the September statement includes new language noting that “inflation has moved up,” “job gains have slowed,” and “downside risks to employment have risen.”
  • During his remarks, Chair Powell acknowledged that the Fed’s dual mandate goals of maximum employment and stable prices are in tension and, with recent weakening in the labor market, the “balance of risks has shifted.”
  • Despite being in an “unusual situation” with “two-sided risk” to its dual mandate, Chair Powell stressed that inflation has eased considerably from its highs, the unemployment rate remains low, and the FOMC views this rate cut as another step toward a more neutral policy stance.
  • Chair Powell reiterated that the Fed is strongly committed to maintaining its independence, a topic that has been widely discussed in recent months, and that it is “deeply within [the Fed’s] culture to do [its] work based on the incoming data” without allowing political considerations to drive monetary policy decisions.

Important Disclosures
This report includes the thoughts and opinions of AGNC Investment Corp. (“AGNC”) and is being shared for informational purposes only and should not be construed as investment advice. Neither the Federal Reserve nor any other third party has contributed to or been involved in AGNC’s preparation of these materials. AGNC does not endorse or adopt the views of the Federal Reserve or any third party.

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