Much anticipated rate cut comes to pass. At its September meeting, the Federal Open Market Committee reduced the lower bound of the overnight lending rate from 4.25 percent to 4.00 percent. While this was the first rate cut since December 2024, the decision was widely expected by Wall Street. Chairman Powell characterized the change as a “risk management cut” in response to the weakening labor market, shifting the rate closer to a neutral level. The pace of balance sheet runoff, meanwhile, was maintained. Less certain is where the Federal Reserve will go from here.