Americans Can Expect More Rate Cuts From The Fed And This Is Why

On Wednesday, September 17, the Federal Reserve made its first rate cut in nine months. The Federal Reserve, or "The Fed," is the central bank of the United States. It is an independent government entity known to control interest rates, along with the Federal Open Market Committee (FOMC). By controlling these interest rates, The Fed's main goals are to keep prices steady — by combatting inflation — and to keep as many Americans employed as possible.

During the September meeting, The Fed almost unanimously voted to cut interest rates by a quarter-point. The Fed's Chair, Jerome Powell, described The Fed's rate stance as "modestly restrictive" in a press conference after the cuts, but, more importantly, new dot plot projections (which track the direction that FOMC members believe interest rates are headed) from the September meeting imply that additional cuts are coming — potentially during both the upcoming October and December meetings.

While September's quarter-point cut could have positive impacts for certain small business borrowers, as well those with credit card debts and car loans, it's important to know that there is still some interest rate-related room to grow. While Powell and The Fed have come under intense scrutiny during Trump's second term, Powell has, so far, kept The Fed focused on practicality and neutrality. However, it's worth mentioning that the sole dissenting vote in September's meeting came from a newly-elected Fed governor who was only sworn in the day before the vote: Trump loyalist, Stephen Miran.

The major factors to track when it comes to additional rate cuts are a lack of hiring and the eventual rise in prices tied to tariffs. While some hiring in defense and immigration enforcement sectors are likely to pick up, thanks to Trump's "Big Beautiful Bill," it is hard to say how that might affect larger employment numbers. Per the Bureau of Labor Statistics, August 2025 saw a hiring stall, dropping 13,000 jobs from June. This was the most jobs lost since December 2020. Plus, spiked inflation — due to tariffs — and fears surrounding high prices under tariffs (like those from China, whose trade talks are still underway), could also lead to decreased hiring. Ultimately, a drop in hiring may rob Americans of their spending power, as well as force The Fed's hand into additional rate cuts.

With that said, some economic advisors foresee another quarter-point cut at both the October and December Fed meetings, while some see another quarter-point cut only in October, with a pause in December. However, slowly reaching a full-point cut over the course of the year may not lead to massive relief for most borrowers. While saving $1 a month on a credit card bill payment can be nice, it certainly isn't leading to big savings. Credit card interest rates and home mortgages are still notoriously high. Auto loan rates are also currently higher due to the tight market, and those prices may only continue to increase, without the promise of any low or zero-rate deals.

Affecting the cost of money, and credit, in the U.S. is not meant to be a function of any political agenda, but rather a matter of national good. However, while the Fed has a meticulous, careful approach to adjusting its rate cuts, trouble has been brewing with its autonomy. Powell and the Fed have been under near-constant verbal attack from Trump in his second term, largely due to the institution's independence from the President. Plus, despite the Fed bracing for Trump's policies and attacks, the inclusion of Stephan Miran as a Federal Reserve governor could shape future decision-making.

For the 100-plus years that the Fed has existed, no President has ever attempted to fire a Fed governor. However, Trump has aggressively pursued (and has, as of September 25, been legally denied) the ability to fire current Fed Governor, Lisa Cook. Unfortunately, Trump's verbal issues with the Fed can be interpreted as a quest for further political power, by taking advantage of the institution's until-now unregulated authority. Having a supporter like Miran on the voting board could fundamentally change the Fed's process, and lead to surprising effects on future rate cuts — as well as the larger American economy. This, paired with uncertainty over tariffs, and their impending effects on pricing and trade, could further slow down the job market while throwing even more national interest onto the Federal Reserve.