September 18, 2025 | 10:19 am
TEMPO.CO, Jakarta - The United States Federal Reserve (The Fed) has finally reduced the benchmark interest rate on Wednesday, September 17, 2025, local time, or early Thursday in Indonesia. The Fed announced a 25-basis-point cut to a target range of 4-4.25 percent.
The Federal Open Market Committee (FOMC) stated that the U.S. labor market is weakening. The latest indicators indicate a slowdown in economic activity in the first half of this year. "Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated," as quoted from the press release on federalreserve.gov on Thursday, September 18, 2025.
The FOMC will continue to monitor the implications of incoming information for the economic outlook. In the official statement, they are prepared to adjust the monetary policy stance as appropriate if risks emerge that could impede the committee's goals.
Previously, Bank Indonesia (BI) had predicted that the Fed would reduce the benchmark interest rate, or the Fed Funds Rate (FFR), with a probability of more than 90 percent. BI revealed this projection following the FOMC meeting on September 16-17, 2025, in the U.S.
"We estimate with a probability exceeding 90 percent, the Fed's benchmark interest rate or Fed Funds Rate will start to fall tomorrow," said BI Governor Perry Warjiyo during a press conference following the BI Board of Governors Meeting (RDG) on September 17, 2025, as quoted by Antara.
Yesterday, on September 17, 2025, Bank Indonesia also decided to reduce the benchmark interest rate, or BI Rate, by 25 basis points to 4.75 percent.
Editor's Choice: Bank Indonesia Cuts Benchmark Interest Rate to 4.75%
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