The US Federal Reserve lowered its benchmark interest rate by 0.25 percentage points, bringing it to the 4.0%–4.25% range, in an effort to manage slowing job growth while keeping inflation in check.

The move came after weeks of political tension between Fed Chair Jerome Powell and President Donald Trump, who had repeatedly pressured for steeper cuts. Powell had resisted since December, citing concerns about inflation, but recent signs of economic weakness swayed the decision.

At a news conference, Powell described the situation as “two-sided risks of weaker growth and higher inflation,” adding, “There is no risk-free path.”

Despite unemployment holding steady at 4.3%, job creation has slowed significantly—from 139,000 new jobs in May to just 22,000 last month. Inflation, meanwhile, rose to 2.9% in August, up from 2.7% in July. Powell also suggested that immigration restrictions may have constrained the labor supply.

The Fed signaled the possibility of two additional cuts later this year. However, one governor, Stephen Miran—recently appointed by Trump—dissented, arguing for a deeper 0.5% cut.

Trump, currently in Britain, has escalated his criticism of Powell, branding him “Too Late Powell” and accusing him of hindering economic growth. Trump had even threatened to dismiss Powell, though the legality of such a move remains doubtful.

The President has also clashed with Fed governors, attempting to remove Biden nominee Lisa Cook over alleged irregularities, but a court blocked her dismissal.

Powell reaffirmed the Fed’s independence: “We don’t frame these questions in terms of political outcomes. We’re trying to serve the American people as best we can.”