The Federal Reserve on Wednesday lowered interest rates for the first time since December to support America’s faltering labor market. However, the economy’s path forward looks murky, according to the central bank’s leader.

After months of economic debate and mounting attacks from US President Donald Trump, the US central bank is poised to cut interest rates on Wednesday.

Stocks closed mixed after the Federal Reserve's rate cut and Chair Jerome Powell outlines a meeting-by-meeting approach on next rate decisions.

Fed officials see more rate cuts in the remainder of 2025 than they did previously—a shift that suggests they are growing increasingly worried about the economic outlook and the weakening labor market.

The threat of stagflation means the risk of getting the policy wrong is high for Powell — and no less so for Trump, whose presidency could ride on the outcome.

The latest Fed meeting is extraordinary, not just because central bankers are finally pivoting their strategy on interest rates, but also because of the latest developments implicating the Fed’s powerful board — all while the Trump administration continues to pile pressure on the politically independent central bank.

The Fed updates its U.S. economic forecast four times a year. Here are the latest numbers, with the prior estimates in parenthesis. In short: The Fed’s projects elevated inflation, stable unemployment and a more aggressive pace of interest rate cuts this year.