Bottom Line Up Front: Federal Reserve independence is less an insulated technocracy than a constantly bargained truce among elected officials, agencies, and markets. The September 2025 rate cut amid tariff pressures and labour market revisions exposes this reality—and points toward a more honest governance framework for central banking under democratic constraints.
The US central bank is cutting interest rates again—gingerly. On September 17, 2025, the Federal Open Market Committee trimmed its policy range by 25 basis points to 4.00–4.25%, its first step down after an extended hold. The statement was careful, almost legalistic, about “the balance of risks.” But the numbers tell a different story: core PCE inflation hovering around 2.6–2.9% year-over-year since April, real GDP contracting at –0.5% annualised in Q1 before rebounding to +3.3% in Q2, and a Bureau of Labor Statistics benchmark revision showing 911,000 fewer payroll jobs than previously counted. Meanwhile, the White House’s …
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