Image source, EPA

At 14:00 on the east coast of the US, the US Federal Reserve cut its key interest rate by 0.25 percentage points - the first cut this year.

Half an hour later, the chair of the Fed - the US central bank - gave a news conference. Here are the key points:

• Powell said President Trump's tariffs are beginning to push up some prices - but the "overall effects on economic activity and inflation remain to be seen"
• On the jobs market, he said lower immigration, not tariffs, are having a bigger impact: "There's very little growth, if any, in the supply of workers"
• Speaking about the housing market, Powell said today's cut might not have a huge effect: "Most analysts think it would have to be pretty big change in rates to matter a lot for the housing sector"
• On the wider impact of today's cut, he said: "I thought a quarter point won't make a huge difference to the economy"
• But he said that didn't mean further cuts were inevitable: "We're not on a pre-set path"

• Speaking about new Fed governor Stephen Miran - who is on leave from his job as chief economist in the White House, and who voted for a bigger interest rate cut - Powell said: "We're strongly committed to maintaining our independence"
• And on Lisa Cook, the governor Trump tried to fire, Powell said it would be "inappropriate" for him to comment on the court case

Before he finished speaking, Powell was asked about revisions to employment data recently released from the Bureau of Labor Statistics, which point to a weaker US jobs situation at the start of the year than previously thought.

Powell says the revisions are primarily due to how the data is collected and the low response rate from employers to surveys from the bureau that compiles the data. This means that often the most reliable data is several weeks behind, he says.

"We want higher response rates, and we need those to have less volatile data," he says, "And the way to get that is to make sure that the agencies that collect the data have sufficient resources to drive higher response rates. It's not a complicated problem, but that's what it takes."

However, the monthly data they get is still "good enough for us to do our work," Powell says.

The Fed boss is also asked if the central bank would have cut rates earlier had the jobs numbers correctly reflected the less abundant jobs situation previously.

"You know, we have to live life looking through the windshield rather than the rear view mirror," he says. "All I can tell you is we see where we are now and we take appropriate action and we took that appropriate action today."

Danielle Kaye
New York business reporter

As we reported earlier, the long-frozen housing market has been a big part of Trump's calls for the Fed to lower rates. Trump has raised hopes that a Fed cut will lower borrowing costs for Americans.

But Powell, during the news conference, echoed what economists have been cautioning: Fed policy only indirectly affects mortgage rates, and a quarter-point cut won't unlock the housing market.

"Most analysts think it would have to be pretty big change in rates to matter a lot for the housing sector," Powell said.

Lower rates could boost demand and encourage builders to ramp up supply, he said. But he added that there's a nationwide housing shortage, which won't be solved by Fed policy alone - especially not just one quarter-point cut.

Fed officials have projected two more rate cuts this year. But the so-called dot plot that shows each member's stance shows a divide between those pencilling in more aggressive rate cuts this year, and those urging caution.

But Powell, speaking to journalists, reiterates his view that those differences in opinion are normal, as the Fed assesses a tricky combination of inflationary risks and a cooling economy.

It's "very unsurprising given the quite unusual, historically unusual, nature of the challenges we face," he says.

"We ended with a high degree of unity," Powell adds.

Most people on the Fed's board supported today's cut. The US is not facing an exceptionally challenging economy, he says.

With that, the news conference has ended.

Image source, Reuters

In response to a question about Treasury Secretary Scott Besant’s comments that the Federal Reserve suffers from “mission creep and institutional bloat” and his call for an independent review, the Fed chair says: “I’m not going to comment on anything the secretary says.”

But he then goes on to discuss some reforms at the Fed.

Powell says the Fed is going through a 10% headcount reduction across the whole institution.

“The employment at the Fed, at the end of that, will be basically at the same level it was more than 10 years ago,” he says.

“So we will have had zero job growth for more than a decade, when we’re finished with that. And I think we’ll probably do more than that.

“So I think we’re certainly open to constructive criticism and ways to do our jobs better, not an independent review."

Is stagflation here?published at 20:24 BST

20:24 BST

Michelle Fleury
New York business correspondent

Jerome Powell has effectively acknowledged that the US economy is struggling on two fronts: prices are rising, and job growth is slowing.

Here’s how the Fed put it in its official statement:

"Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated."

That sounds an awful lot like the dreaded stagflation — the toxic mix of stagnant growth and rising prices that the US hasn’t seen in four decades.

And it raises the stakes for Powell, who risks misjudging the right policy response since these two challenges often demand conflicting remedies.

The pressure is just as high for Donald Trump, whose presidency could hinge on how this plays out.

Natalie Sherman
New York business reporter

Image source, Reuters

This is an uncomfortable press conference for Powell.

He's usually fielding questions trying to figure out where interest rates might be headed, and how worried the Fed is about inflation or the job market.

He's getting some of those. But many of the questions stem from the political pressure the Fed is facing, whether in the form of a new Trump appointee on the committee, the White House effort to fire another member of the board, or calls by the treasury secretary for a broader review of the institution.

Powell is pretty consistently opting not to comment, arguing that the bank's decision-making will speak for itself when it comes to its independence.

As we reported earlier, Fed boss Jerome Powell says higher tariffs - charged by the Trump administration on imports - have begun to push up some prices. But he says the "overall" impact is still "to be seen".

When taking questions he also talked about the impact of tariffs on the job market.

He says tariffs "may" be contributing to the slowdown in the job market. But he says the bigger driving force is slowing immigration rates.

"The supply of workers has obviously come way down," Powell says. "There's very little growth, if any, in the supply of workers. And at the same time, demand for workers has also come down quite sharply."

He adds: "You know, typically when we say things are in balance, that sounds good. But in this case, the balance is because both supply and demand have come down quite sharply."

Powell is asked about Trump's appointee Stephen Miran joining the board, directly from the White House. Powell is asked if there are concerns about the Fed's independence from everyday politics.

"We did welcome a new committee member today as we always do and the committee remains united in pursuing our dual mandate goals," Powell says referring to the bank's aims to achieve stable prices for consumers and maximum sustainable employment.

"We are strongly committed to maintaining our independence," he says before adding that he has no further comments.

As a reminder, Miran was the lone dissenter at the table today.

More now from Powell.

In explaining the Fed's decision on the interest rate cut, he says: "I thought a quarter point won't make a huge difference to the economy".

"But you've got to look at the whole path of rates," he says. "Markets have already been baking in expectations."

Journalists have asked Powell about Lisa Cook, the Federal Reserve governor Trump tried to fire, before a federal appeals court intervened.

"You know, I see it as a court case that it would be inappropriate for me to kind comment on," the Fed governor says.

Natalie Sherman
New York business reporter

Market reaction to this announcement and press conference so far has been fairly muted.

The three main indexes initially jumped, before giving up those gains as the press conference has continued.

That has left the Dow flat, the S&P 500 down 0.6% and the Nasdaq down roughly 1%.

Markets tend to like lower interest rates - but a weakening economy wouldn't be good news either.

And while the unemployment rate remains low, Powell has emphasised "downside" risks to the job market after its summer slowdown.

Danielle Kaye
New York business reporter

Image source, Reuters

Speaking to journalists, Powell underscores the Fed's renewed focus on the labour market. He says "the balance of risks has shifted" toward the employment side of the central bank's mandate.

"The risks were clearly tilted toward inflation," he says.

But now, "you see a very difference picture of the risks to the labour market".

Data in recent weeks has painted a picture of a cooling jobs market, with large downward revisions to hiring in the summer months and a mere 22,000 jobs added in August.

The Fed chair points to immigration as the key driver of weakness in the labour market. "Both supply and demand have come down quite sharply," he says.

The Fed's interest rate influences what companies charge people in the US for loans, including mortgages, or other debt, like credit card balances or car loans.

But today's cut doesn't mean all debt gets cheaper. Fixed-rate mortgages won't change, for example. Other loans might be "locked" at a certain rate.

People on adjustable mortgage rates could start paying less. Likewise, people looking for new loans could now find cheaper deals. However, it may take more than a 0.25 percentage point cut for those changes to really kick in.

And don't forget - not everyone is a borrower. If you have savings that earn interest, you could now earn less.

Danielle Kaye
New York business reporter

Image source, Aileen Barrameda

The cost of housing is a key concern among Americans - and a political talking point in the context of interest rates. US President Donald Trump has raised hopes that interest rate cuts from the Fed will help Americans get mortgages.

But mortgage rates are indirectly influenced by Fed policy, among other factors. Economists and housing finance experts caution that the Fed's rate cut today has already been priced into the drop in the 30-year mortgage in recent weeks.

Those on the hunt for a home, who are expecting a lot more easing when it comes to borrowing costs, might be disappointed. It's a reality that Aileen Barrameda, who is looking to buy a house in Los Angeles, is navigating. She said she's willing to jump into the market even with mortgage rates still well above 6%.

"If I have the means to get in the market, I might as well get in now, because homes are just going to get more expensive," Barrameda said.

Image source, Reuters

Fed chair Jerome Powell says higher tariffs have begun to push up prices on some goods, but their wider impacts remain to be seen.

You can follow his comments by clicking watch live at the top of this page.

Danielle Kaye
New York business reporter

In the Fed's fresh projections, there are signs of division among officials as to how much more rates will fall this year.

Nine of the 19 officials projected that 2025 will end with a federal funds rate in the 3.5% to 3.75% range - another half percentage point lower.

But seven officials pencilled in fewer cuts.

And on the other end, one outlier projected a much larger drop this year, to the 2.75% to 3% range.

The outlier, while anonymous, is likely to have been Stephen Miran, Trump's new appointee who dissented in favour of a larger cut today.

In the next few minutes, we're expecting Federal Reserve Chair Jerome Powell to host a news conference.

Stay with us as we bring you the key lines.

You can also click watch live at the top of this page.

Michelle Fleury
New York business correspondent

Image source, EPA

Just one Fed official broke ranks today — Stephen Miran, the newest face at the table.

He wanted a bigger rate cut than the quarter-point move we got. That might not seem like much but it matters, not just because it was a lone dissent, but because of who it came from.

Miran is on leave from his job as chief economist in Donald Trump’s White House — and is seen as close to the president, who has long pushed for deeper cuts to boost the economy.

With US inflation still high but the jobs market showing cracks, Fed officials were always walking a tightrope.

But Miran’s more aggressive stance is raising eyebrows — and questions about politics creeping into policy.

Natalie Sherman
New York business reporter

The Fed has released a set of projections alongside its decision this month, which offer clues about how policymakers are thinking about the economy, and to what extent that has changed.

On average, bets about the path of inflation haven't changed.

Forecasters are expecting the Fed's preferred inflation gauge, personal consumption expenditures, to come in at 3% this year, the same as in June, though they're expecting a bit higher inflation next year than they were three months ago.

Expectations for unemployment haven't shifted either, with most projecting the unemployment rate to rise to 4.5% by the end of this year.

But policymakers are expecting growth to be stronger this year and next than previously anticipated, with the economy expanding 1.6% in 2025, compared with the 1.4% they had projected in June.