Washington, 17 September 2025 (dpa/MIA) - The US Federal Reserve has lowered the key interest rate by 0.25 percentage points for the first time this year due to a weak labour market, with the range now between 4 and 4.25%, the board of governors said in Washington on Wednesday.

The Fed also said it is now expecting higher economic growth this year than previously anticipated, now forecasting an increase of 1.6% for this year, after it had revised its economic expectations down to 1.4% in June. For the inflation rate, the Fed continues to expect 3%.

Many analysts had already anticipated the rate cut, after the labour market in the United States had significantly weakened. US President Donald Trump had also vehemently demanded a lower rate - however, this is likely to have played only a minor role in the decision.

With the cut, the Fed's rate-setting council is attempting to find a compromise solution for the increased risks in the labour market while inflation is rising.

Of the 12 voting members at the Fed, 11 voted for a cut by one interest rate step, or 0.25 percentage points. Only Trump ally Stephen Miran, who was confirmed as an interim solution on the Fed board at the beginning of the week, spoke out for a larger cut - entirely in line with Trump's wishes.

Photo: MIA archive