Rising Labor Market Risks Unite the Fed to Deliver 25bps Cut
Our Privacy Policy has been updated! The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "ACCEPT", you acknowledge our privacy policy and consent to the use of cookies. 

Economic Data & Analysis

Global Economy Briefs

Timely insights from the Economy, Strategy & Finance Center

Trusted Insights for What’s Ahead®

  • The Fed cut policy rates by 25bps at the September 16-17 FOMC meeting. This, coupled with slightly better economic projections in the Summary of Economic Projections (SEP), represented a change in the Fed’s reaction function.

Rising Labor Market Risks Unite the Fed to Deliver 25bps Cut

September 17, 2025

Trusted Insights for What’s Ahead®

  • The Fed cut policy rates by 25bps at the September 16-17 FOMC meeting. This, coupled with slightly better economic projections in the Summary of Economic Projections (SEP), represented a change in the Fed’s reaction function.

  • The Fed chose to be more preemptive, rather than being fully data-dependent, – something Chair Powell referred to as a “risk management cut.”
  • The SEP showed that the Fed’s perception of risks to the employment mandate shifted higher, while risks to the inflation mandate moved slightly lower (see Figure 1 below). Further evolution of risks surrounding the health of the labor market and inflation will define the near-term path for rates.
  • Even as the median dot in the SEP projected an additional 50bps of cuts by yearend, the dot plot indicated a very close call among FOMC participants between 50bps or 25bps of additional cuts in 2025.
  • The Fed will pay close attention to the near-term trajectory of the unemployment rate as a measure of slack in the economy, rather than a less reliable signal from payrolls. 
  • An increase in the unemployment rate in September from the current 4.3% would likely warrant a
Download Brief

Author

Yelena Shulyatyeva

Yelena Shulyatyeva

Senior US Economist

Read Bio

This publication is only available to Members. Please sign in to your myTCB® account to access it. To learn more about becoming a Member, click here. To check if your company is a Member, click here.

Sign In

Forgot your password

Create An Account

 

Keep my computer signed in

Forgot your password

Create An Account

myTCB® Members get exclusive access to webcasts, publications, data and analysis, plus discounts to events.

More From This Series

Brief

Rising Inflation Still Leaves Room for Fed Rate Cuts

September 26, 2025

Brief

Fed to Cut 25bps to Preserve Delicate Economic Balance

September 16, 2025

Brief

August Retail Sales Reflect Consumer Resilience—for Now

September 16, 2025

Brief

Tariffs a Factor, but Still Muted in CPI; Fed to Focus on Labor Market

September 11, 2025

Brief

Consumers Continue to Favor Necessities amid Rising Prices

August 29, 2025

Brief

Pre-Aug 1 Tariff Buying Likely Boosted July Retail Sales

August 15, 2025

Charts

Global Gray Swans Tool

The Gray Swans Tool helps C-suite executives better navigate today’s quickly developing economic, political, and technological environments.

LEARN MORE Yellow and white frame illustration

Charts

Future Occupational Labor Shortages Risk Index (database)

This index identifies the risk of future labor shortages for specific occupations.

LEARN MORE Yellow and white frame illustration

Charts

US-China Gray Swans Watchlist - Risk Assessment Tool

Our goal is to help members see beyond the political dynamic to inform a medium-term view that supports your strategic planning at this difficult juncture.

LEARN MORE Yellow and white frame illustration

U.S. Economic Indicators

  • Consumer Confidence - 3.6 pts
  • Employment Trends Index - 0.76 %
  • Help Wanted OnLine + 1.0 %
  • Leading Economic Index - 0.5 %
  • Measure of CEO Confidence + 15.0 pts

    • Innovation and Productivity

    Total Economy Database

    Global Economic Outlook

    Global Economic Outlook

    Global Economic Indicators

  • Australia 0.0%
  • Brazil -0.9%
  • China -0.5%
  • Euro Area -0.3%
  • France +0.2%
  • Germany -0.1%
  • Global -0.4%
  • India +0.1%
  • Japan -0.7%
  • Korea +0.7%
  • Mexico +0.1%
  • Spain +0.3%
  • U.K. -0.1%
  • U.S. -0.5%

    • Economic Indicator Calendar

    All release times displayed are Eastern Time


    Note: Due to the US federal government shutdown, all further releases for The Conference Board Employment Trends Index™ (ETI), The Conference Board-Lightcast Help Wanted OnLine® Index (HWOL Index), The Conference Board Leading Economic Index® of the US (US LEI) and The Conference Board Global Leading Economic Index® (Global LEI) data may be delayed. TCB will resume publication once updated US federal government data are released.


    Related Content

    Connect and be informed about this topic through webcasts, virtual events and conferences

    Image

    Recession & Growth Trackers
    Image

    US Leading Indicators
    Image

    Help Wanted OnLine®

    Press Releases / In the News

    PRESS RELEASE

    US Consumer Confidence Declines Again in September

    September 30, 2025

    PRESS RELEASE

    LEI for the Global Economy Continued to Decline in July and August

    September 29, 2025

    PRESS RELEASE

    LEI for China Declined Again in August

    September 25, 2025

    PRESS RELEASE

    LEI for India Ticked Up in August

    September 23, 2025

    PRESS RELEASE

    LEI for the Euro Area Declined in August

    September 19, 2025

    PRESS RELEASE

    The Conference Board Leading Economic Index® (LEI) for the US Declines in August

    September 18, 2025

    Data central

    Subscribe to Access Data Central & Chart Reports

    Your centralized, one-stop portal for accessing and exporting The Conference Board global suite of monthly and quarterly economic data. Get up to speed on critical trends—anytime, anywhere—with customizable real-time datasets.

    Upcoming Events

    Connect and be informed about this topic through webcasts, virtual events and conferences

    Explore More on this Topic

    Publications

    Tariff Tracker

    Tariff Tracker

    September 30, 2025 | Additional Resources

    Global LEI Report

    Global LEI Report

    September 29, 2025 | Report

    On Demand Webcasts, Podcasts and Videos