The US Federal Reserve lowers interest rates by 0.25 percentage points.

U.S. Federal Reserve Chair Jerome Powell speaks at a press conference in Washington, D.C., on September 17, 2025, after the Federal Open Market Committee's interest rate policy statement is released. Image Source: Reuters

This is the Fed's first rate cut since December, and officials say they anticipate lowering their key rate twice more this year.

As the central bank becomes increasingly concerned about the state of the labour market in the country, the Federal Reserve lowered its key interest rate by a quarter point on Wednesday, September 17, 2025, and announced it would do so twice more this year.

The Fed reduced its short-term rate from 4.3% to roughly 4.1% in what is its first cut since December. As they assessed the effects of tariffs, stricter immigration enforcement, and other Trump administration policies on inflation and the economy, federal officials, led by Chair Jerome Powell, had maintained their rate at its current level this year.

However, since hiring has essentially stopped in recent months and the unemployment rate has increased slightly, the central bank's attention has swiftly shifted from inflation, which is still slightly above its 2% target, to jobs.

Reduced interest rates could increase hiring and growth while lowering borrowing costs for business, auto, and mortgage loans.

At a press conference after the Federal Reserve's two-day meeting, Mr. Powell stated, "The downside risks to employment appear to have increased in this less dynamic and somewhat softer labour market."

To the dismay of Wall Street, federal officials also hinted that they plan to lower their key rate twice more this year but only once in 2026. Investors had forecasted five cuts for the remainder of this year and the following year prior to the meeting.

Stephen Miran, who was appointed by President Donald Trump and confirmed by the Senate in a hurried vote late Monday (September 15, 2025), just hours before the meeting started, was the only Federal policymaker to disagree with the ruling. Miran favoured a larger half-point cut, but Mr. Powell informed reporters that Federal officials didn't "support" the larger cut.

The outcome of the meeting indicates that Mr. Powell was able to put together a show of unity from a committee that includes Miran, two other Trump appointees from his first term, and a Federal Governor, Lisa Cook, whom Mr. Trump is trying to fire. Many economists had predicted that there would be more dissent.

Threats to the Federal's long-standing independence from daily politics coexist with a difficult economic climate. While hiring has slowed, inflation has remained stubbornly high. According to the consumer price index, it increased 2.9% in August compared to the same month last year, up from 2.7% in July and significantly above the Fed's 2% target.

Weaker hiring and higher inflation are unusual because a slowing economy usually makes consumers cut back on spending, which slows price increases. Last month, Mr Powell implied that even if tariffs raise prices even more, slow growth might control inflation.

Separately, many legal experts view Mr. Trump's attempt to fire Ms. Cook as an unprecedented assault on the Federal's independence, as it marks the first time a president has attempted to remove a Federal Governor in the central bank's 112-year history.

Ms. Cook has been accused of mortgage fraud by his administration, but this accusation comes after Mr. Trump has heavily criticised Mr. Powell and the Federal Reserve for not lowering interest rates more quickly and sharply.

Late on Monday, September 15, 2025, an appeals court maintained a previous decision that Ms. Cook's due process rights were violated by the termination. Additionally, a lower court had previously decided that Trump's removal of Ms. Cook lacked adequate justification. The Senate voted in favour of Mr Miran's nomination late on Monday, September 15, 2025, and he was promptly sworn in on Tuesday, September 16, 2025.

Federal officials "have to make their own choice," but "they should listen to smart people like me," Mr. Trump stated on Tuesday, September 16, 2025. The Federal Reserve should lower rates by three full percentage points, according to Mr. Trump.

The Federal Reserve is in a different position than many other central banks abroad as a result of its decision to lower interest rates. Since inflation has mostly decreased and the economy has so far suffered little from U.S. tariffs, the European Central Bank kept its benchmark rate unchanged last week.

The Bank of England is also anticipated to maintain its rate on hold on Friday, September 19, 2025, given that inflation, at 3.8%, is still higher than in the US.

Israel-Hamas conflict: Biden says he thinks an agreement to free the hostages in Gaza is close.

According to Reuters, US President Joe Biden stated on Monday that he thinks an agreement to exchange a truce for the release of some of the hostages held by Hamas in Gaza is near. During a Thanksgiving ceremony at the White House, the US President responded, "I believe so," when asked if a deal was imminent.

Last week, Reuters revealed that Qatari mediators were trying to broker an agreement between Israel and Hamas to swap 50 hostages for a three-day cease-fire. The agreement, according to the mediators, would facilitate the delivery of humanitarian aid to Gaza's civilian population.

About 240 people—including women and children—were captured on October 7 as Hamas launched a cross-border attack on Israel. There are perhaps 33 kids among the hostages. Israeli data indicates that this surprise attack by Hamas, the bloodiest in Israel's 75-year history, claimed the lives of roughly 1,200 Israelis, the majority of whom were civilians. Israel, which views Hamas as an Islamist militant organisation, invaded Palestinian territory in response to this unexpected attack in order to destroy the organisation.

Since then, the Israeli army's relentless bombardment of Palestinians has resulted in the deaths of at least 13,000 people, including 5,500 children, according to the Hamas-run government in Gaza.

In the meantime, the Hamas-run health ministry said that Israel had carried out a fatal attack on the Indonesian hospital in Gaza, forcing 28 preterm babies to be evacuated from the war-torn region to Egypt.

The WHO revised by one the number provided by Egyptian media, saying that 28 preterm newborns rescued from Gaza's largest hospital, Al-Shifa, had been transferred to safety in Egypt through the Rafah crossing.

Although the Israeli army claimed to have "helped facilitate" the transfer, the WHO stated that "all babies are fighting serious infections and continue needing health care."

Israel claims that Hamas has employed extensive military tunnel networks beneath Al-Shifa. Additionally, it has displayed weapons that have been retrieved, and on Sunday, Israel declared that it had found a tunnel but had not yet found any indications of a significant military headquarters underground.

During her husband Rishi Sunak's event, Akshata Murty "gatecrashed" and stole his thunder.

In a surprise appearance before the Conservative Party conference in Manchester on Wednesday, Akshata Murty introduced her "best buddy" Rishi Sunak for his first speech in that capacity.

New Delhi: Akshata Murty, the first lady of the UK of Indian descent, provided some insight into her relationship with her husband Rishi Sunak in her widely shared political debut speech.

In a surprise appearance before the Conservative Party conference in Manchester on Wednesday, Ms. Murty introduced her "best buddy" Rishi Sunak for his first address in that capacity. She stated that her spouse was ignorant of her "gate-crashing" as the warm-up act before the annual conference's centrepiece during her lighthearted and frank address.

Here are some of the quotes from Akshata Murty 's speech:

We are best friends, one team

I could not image being anywhere else than here today to express my support for Rishi and the party because we are each other's greatest friends.

Struck by two things about him

"When we were both 24 years old and studying abroad in America, Rishi and I first connected. Two things about him stood out to me right away: his ardent love for his own country of the United Kingdom and his genuine desire to provide as many people as possible the chance to experience the same possibilities he was fortunate enough to enjoy. He felt utterly energised by it. The decision to be with Rishi was the simplest I've ever made ".

During tough times

"I occasionally remind Rishi that he is fighting for his principles when things become difficult. that despite the difficulties ahead, he is fighting for the principles of our party. That success is a difficult one ".

His incredible zest for life

"He has an amazing enthusiasm for living. His moral rectitude, forthrightness, and ability to distinguish right from wrong were what pulled me to him the most. It's what I continue to be pulled to even now, 14 years into my marriage."

A proud wife

"Rishi, you are aware that doing the right thing over the long run, despite difficulty, is the best course of action. I hope you are also aware of how happy you make our daughters and me every day ".