Staff Reports
The Federal Reserve finally delivered its long-awaited interest rate cut, reducing the benchmark rate by 0.25 percentage points to a range of 4.00% to 4.25%—the first reduction since December 2024. This move comes after months of pressure from political leaders and economic observers who have criticized Fed Chairman Jerome Powell for his sluggish response to clear signs of economic softening. While this modest cut represents a step in the right direction, it raises serious questions about the Fed's delayed reaction to mounting economic pressures facing American families.
For over a year, Americans have endured the crushing burden of elevated interest rates while the Fed's bureaucrats deliberated endlessly over obvious economic indicators. Housing costs have remained prohibitively high, small businesses have struggled with borrowing costs, and working families have faced financial strain—all while Powell and his committee sat on their hands. The decision to finally act came only after sustained criticism and mounting evidence that the labor market was deteriorating, with job growth slowing to just 29,000 monthly additions compared to 130,000 earlier in the year.
Fed cut rates. But the real signal came from Powell’s words:
– Inflation risks are lower than in April.
– 10 of 19 members expect two or more cuts this year.
– Decisions will now be made meeting by meeting.
– A single 25 bps move won’t change much. This is just the beginning.… pic.twitter.com/VyFTBbdHEI— Thomas Kralow (@TKralow) September 18, 2025
The Fed's own internal divisions reveal the dysfunction at the heart of this institution. Newly appointed Governor Stephen Miran was the sole dissenter, advocating for a more aggressive half-point cut that would provide meaningful relief to American borrowers. His position reflects a more urgent understanding of economic realities, while the majority chose timid incrementalism over bold action. Powell's characterization of this as a "risk management cut" rather than a fundamental policy shift exposes the central bank's reluctance to acknowledge the severity of current economic challenges.
This monetary policy represents a broader problem with establishment thinking in Washington. The Federal Reserve, filled with academic elites and career bureaucrats, operates in an ivory tower detached from the struggles of ordinary Americans. Their preference for gradual, measured responses over decisive action has prolonged economic uncertainty and delayed relief for families and businesses. While they worried about theoretical inflation risks, real Americans dealt with the concrete burden of unaffordable borrowing costs.
The Fed's projection of two additional quarter-point cuts this year signals continued hesitation rather than the aggressive stance needed to restore economic vitality. Americans deserve monetary policy that prioritizes growth, job creation, and affordable credit over the academic theories that have guided Powell's indecisive leadership. This rate cut, while welcome, represents too little, too late from an institution that should have acted months ago to support American prosperity.
