The Week in Review: September 22, 2025
The Fed Delivers a Long-Awaited Rate Cut
To virtually no one’s surprise, the Federal Reserve slashed the target on its key interest rate—the fed funds rate—at the conclusion of its meeting on Wednesday. The only question regarding the decision was whether the Fed would cut by a quarter point (25 basis points [bp]; 1 bp = 0.01%) or 50 bp. They opted for 25 bp and a new range of 4.00-4.25%.
It is the first rate cut since last December. The vote was nearly unanimous at 11–1, with the dissenter favoring a 50 bp reduction.
At the press conference that followed the meeting, Chair Powell said there “wasn't widespread support at all for a 50 bp cut.” He described the move as “risk management,” suggesting that while economic concerns shouldn’t be dismissed, they are not too worrisome right now. What prompted last week’s move? “Labor demand has softened,” Powell said, and the unemployment rate has inched higher.
Yet, he said that tariffs are having some impact on inflation (they are), and that could continue for the rest of the year. However, he added that the pass-through to consumers of tariffs has been “slower and smaller” than expected.
But by moving now, the Fed hopes that lower interest rates will encourage more spending, which supports economic activity.
Yet, inflation is no longer trending toward the 2% target. Nonetheless, the Fed proceeded with a 25 bp rate cut last week and signaled the possibility of further easing this year.
Part of this stance reflects the Fed’s belief that the inflationary impact of tariffs is temporary. Still, if job growth were stronger and the unemployment rate were lower, it seems unlikely the Fed would have reduced rates last week.
Every cycle has its own nuances, but economic growth accompanied by a modest easing by the Fed has historically lent support for stocks.
Market Summary
TWO FOR THE ROAD
Dollar stores are drawing in more affluent customers – specifically households earning more than $100,000 – who are “trading down” as Americans across the income spectrum seek savings in a tight economy. - Reuters, September 3, 2005
“Twenty years from now, you will be more disappointed by the things you didn’t do than by the things you did.” -Mark Twain
Please do not hesitate to contact me with any questions or concerns.
I hope you have a great week!
Warmest Regards,
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
Sources: ConstitutionCenter.org, ConstitutionFacts.com, Military.com, CNN
Stordahl Capital Management, Inc is a Registered Investment Adviser. This commentary is solely for informational purposes and reflects the personal opinions, viewpoints, and analyses of Stordahl Capital Management, Inc. and should not be regarded as a description of advisory services or performance returns of any SCM Clients. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advisory services are only offered to clients or prospective clients where Stordahl Capital Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Stordahl Capital Management unless a client service agreement is in place. Stordahl Capital Management, Inc provides links for your convenience to websites produced by other providers or industry-related material. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third-party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax, or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
1. The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
2. The NASDAQ Composite is an unmanaged index of companies which cannot be invested into directly. Past performance does not guarantee future results.
3. The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
4. The Global Dow is an unmanaged index composed of stocks of 150 top companies. It cannot be invested into directly. Past performance does not guarantee future results.
5. CME Group front-month contract; Prices can and do vary; past performance does not guarantee future results.
6. CME Group continuous contract; Prices can and do vary; past performance does not guarantee future results.