Fed announces first rate cut since Trump's return to office

The Federal Reserve (Fed), the central bank of the United States, announced this Wednesday (17) the reduction of the basic interest rate in the country.

The base rate, which had been maintained in the range of 4.25% to 4.50% since December, was reduced to the range of 4% to 4.25%.

According to the Associated Press, Fed officials also signaled they would cut the benchmark rate twice more this year, but only once in 2026.

The reduction comes after weak job creation figures in the United States and was already expected by the market.

It was the first cut in US interest rates since Donald Trump returned to the White House in January.

The Republican president had been demanding a rate cut: he called Fed Chairman Jerome Powell an "idiot" who does a "terrible job" and accused him of acting with "political motivations." He also considered firing him, but later deflected the matter.

Additionally, Trump said on the Truth Social network that he is considering authorizing the Department of Justice (DOJ) to sue Powell, alleging excessive spending on renovations being made to two Fed buildings.

In late August, Trump announced the dismissal of Fed director Lisa Cook, alleging she committed mortgage fraud before taking the job. Cook went to court, and two courts issued rulings keeping her at the Fed , but the Trump administration is expected to appeal to the Supreme Court.

According to CNN, Stephen Miran, recently appointed to the Fed by Trump, was the only one to vote against the 0.25 percentage point rate cut because he wanted a bigger cut.

At a press conference, Powell was asked about the matter and declined to comment. "We welcomed a new member to the committee today, and as we always do, the committee remains united in pursuing our dual-mandate goals," Powell said.

“We are strongly committed to maintaining our independence and beyond that, I really have nothing to comment on,” he said.