The Federal Reserve announced its first interest rate cut decision of 2023 on September 17, lowering the target range for the federal funds rate by 25 basis points to 4.00%-4.25%. This move aligns with market expectations and marks the first restart of the easing cycle by the Fed since last December.

A notable change in this rate cut decision is the Federal Reserve's increased concerns about the labor market. The statement added references to slowing job growth, a slight rise in the unemployment rate, and increased downside risks to employment, while it removed previous assessments of the labor market's robustness. This change reflects the Federal Reserve's cautious stance on the economic outlook.

It is worth noting that, aside from the new council member Milan, all other members support a 25 basis point rate cut. Milan advocates for a more aggressive 50 basis point cut, but did not receive majority support.

Federal Reserve Chairman Powell emphasized in the subsequent press conference that this rate cut is a risk management measure. He stated that, given the increasing downside risks in the labor market, the policy balance has shifted, and therefore he believes that the decision to move closer to a 'neutral' policy stance is appropriate.

According to the latest median forecast for the Intrerest Rate, the Federal Reserve is expected to cut rates three times this year, an increase of one from previous expectations. This means that after this rate cut, there may be two more rate cuts within the year.

From September to December last year, the Federal Reserve cut interest rates three times in a row. This week's action further expands the cumulative rate cut in this round of easing cycle. This series of measures aims to address the challenges posed by slowing economic growth and increased uncertainty in the labor market.

Market analysts generally believe that the Federal Reserve's decision to cut interest rates reflects its cautious attitude towards the economic outlook, while also leaving room for policy adjustments in response to potential economic fluctuations in the future. However, the sustainability of the rate cut's effects and its impact on the real economy still require further observation.