Comparison of changes in the full text of the Fed's September meeting statement

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On Wednesday, September 17 local time, the Federal Reserve cut interest rates by 25 basis points as expected, lowering the target range for the federal funds rate to 4.00% to 4.25%. The Fed's statement on the economic outlook changed somewhat compared to the July meeting. In this statement:

The Fed removed the phrase “although fluctuations in net exports continue to affect the data.”

The Fed’s statement on the labor market was more pessimistic than at the last meeting. The FOMC statement acknowledges the slowdown in employment growth, mentions a slight rise in the unemployment rate but notes it remains low, deletes the phrase “the labor market remains strong,” and judges that downside risks to employment have increased.

The Fed believes that inflation has risen and remains somewhat elevated. This upward trend in inflation was not mentioned in the previous statement.

Based on the situation in the labor market, the Fed stated that taking into account changes in risk balance, it made this decision to lower rates by 25 basis points.

At this meeting, Stephen I. Miran, newly appointed by President Trump as a Fed governor, was the only dissenting vote, as he believed rates should have been cut by 50 basis points instead of 25. Miran replaced Kugler, who resigned from the Fed board after the July meeting.

The two Fed governors previously appointed by Trump, Bowman and Waller, did not vote for a 50-basis-point cut as some had expected before the meeting; both supported the 25-basis-point cut. At the July meeting, both had voted against, believing a 25-basis-point cut was warranted at that time.

The market also closely watched the actions of Fed Governor Cook. Last month, Trump tried to remove Cook because of controversial real estate transaction allegations. However, this Monday the Federal Appeals Court upheld an injunction, allowing Cook to participate in this FOMC meeting. Cook voted in favor of a 25-basis-point cut; some had anticipated she might take a more hawkish stance before the meeting.

Full Statement Translation

The full statement is translated below. Black text is from the July 2025 FOMC statement, red text indicates additions in September 2025, and text in parentheses and blue font indicates deleted wording from the June statement (please credit the source if sharing):

(Although fluctuations in net exports continue to affect the data,) Recent indicators suggest that economic growth slowed in the first half of the year. Employment growth has slowed, and the unemployment rate has edged up slightly but remains low (the labor market remains strong). The inflation rate has increased, and remains somewhat elevated.

The committee seeks to achieve maximum employment and a 2% inflation rate in the long term. The uncertainty in the economic outlook remains elevated. The committee is closely monitoring risks that could affect its dual mandate, and judges that downside risks to employment have increased.

To support its goals, and taking into account changes in risk balance, the committee decided to lower the target range for the federal funds rate by 0.25 percentage points, to 4% to 4.25% (maintained at 4.25% to 4.50%). When considering any further adjustments to the target range for the federal funds rate (degree and timing), the Committee will carefully assess incoming data, changing outlook, and risk balance. The Committee will continue to reduce its holdings of U.S. Treasury securities, agency debt, and agency mortgage-backed securities. The Committee remains resolutely committed to maximizing employment and returning inflation to its 2% target.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the latest information on the economic outlook. Should risks emerge that could impede achievement of its goals, the Committee is prepared to adjust the stance of monetary policy as appropriate. The Committee’s assessment will consider a wide range of information, including labor market conditions, inflation pressures and expectations, as well as data on financial and international developments.

Those voting in favor of the monetary policy action were: FOMC Chair Jerome H. Powell, Committee Vice Chair John C. Williams, Michael S. Barr, Michelle W. Bowman, Susan M. Collins, Lisa D. Cook, Austan D. Goolsbee, Philip N. Jefferson, Alberto G. Musalem (and), Jeffrey R. Schmid, and Christopher J. Waller. The member voting against this action was Stephen I. Miran(Michelle W. Bowman and Christopher J. Waller), who (they) preferred at this meeting to lower the target range for the federal funds rate by 0.5(0.25) percentage points. (Adriana D. Kugler was absent and did not vote.)

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