This is a live post that is being updated as interest rate announcements happen throughout the week. Check back periodically to stay up to date.
NEW: Fed Rate Cuts vs. Other G7 Countries
Key Takeaways
- The U.S. Federal Reserve (Fed) cut rates by 0.25 percentage points at its meeting on September 17, 2025.
- Since January 2024, Fed rate cuts have been more gradual than those in Canada or the Eurozone.
- Japan is the only G7 country currently in a rate hiking cycle.
For the first time in nine months, the Fed has dropped rates. What’s behind the decision, and how do the Fed rate cuts compare to other central banks?
In this Markets in a Minute from Terzo, we show the change in central bank interest rates for the U.S. relative to other G7 countries.
The Pace of Fed Rate Cuts Since January 2024
Since early 2024, every G7 country except Japan has begun cutting rates from their post-pandemic highs. While Japan is hiking to counter inflation, others are easing in an effort to support economic growth.
The table below shows the change in central bank interest rates since January 2024 in percentage points.
| Month |  Japan |
 U.S. |
 UK |
 Canada |
   Germany, France, and Italy |
|---|---|---|---|---|---|
| 24-Feb | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 24-Mar | +0.15 | 0.00 | 0.00 | 0.00 | 0.00 |
| 24-Apr | +0.15 | 0.00 | 0.00 | 0.00 | 0.00 |
| 24-May | +0.15 | 0.00 | 0.00 | 0.00 | 0.00 |
| 24-Jun | +0.15 | 0.00 | 0.00 | -0.25 | -0.25 |
| 24-Jul | +0.15 | 0.00 | 0.00 | -0.50 | -0.25 |
| 24-Aug | +0.35 | 0.00 | -0.25 | -0.50 | -0.25 |
| 24-Sep | +0.35 | -0.50 | -0.25 | -0.75 | -1.00 |
| 24-Oct | +0.35 | -0.50 | -0.25 | -1.25 | -1.25 |
| 24-Nov | +0.35 | -0.75 | -0.50 | -1.25 | -1.25 |
| 24-Dec | +0.35 | -1.00 | -0.50 | -1.75 | -1.50 |
| 25-Jan | +0.60 | -1.00 | -0.50 | -2.00 | -1.50 |
| 25-Feb | +0.60 | -1.00 | -0.75 | -2.00 | -1.75 |
| 25-Mar | +0.60 | -1.00 | -0.75 | -2.25 | -2.00 |
| 25-Apr | +0.60 | -1.00 | -0.75 | -2.25 | -2.25 |
| 25-May | +0.60 | -1.00 | -1.00 | -2.25 | -2.25 |
| 25-Jun | +0.60 | -1.00 | -1.00 | -2.25 | -2.50 |
| 25-Jul | +0.60 | -1.00 | -1.00 | -2.25 | -2.50 |
| 25-Aug | +0.60 | -1.00 | -1.25 | -2.25 | -2.50 |
| 25-Sep | – | -1.25 | – | -2.50 | -2.50 |
Data as of September 17, 2025.
In the U.S., Fed rate cuts have reached a total of -1.25 percentage points. The latest cut comes amid a jobs report that revealed only 22,000 jobs were added in August, much lower than economists’ expectations of 76,500 new jobs. On top of this, final numbers for June also revealed the economy lost jobs for the first time in four years.
In a press release, the Federal Reserve cited slowing job gains but also a need to monitor inflation, which reached 2.6% in July according to the Personal Consumption Expenditures (PCE) Index. Notably, in a new survey Americans highlighted the cost of living as their biggest personal challenge.
By the end of 2025 the Fed expects the interest rate to decline to 3.50%–3.75%, implying a further cut of 0.50 percentage points.
Also on September 17, Canada announced a rate cut of 0.25 percentage points, citing a weaker economy and less upside risk to inflation compared to earlier in 2025. Relative to Canada and the Euro area, Fed rate cuts have been much more gradual.
The Business Impact of U.S. Rate Cuts
What do Fed rate cuts mean for American business leaders? Even with the latest rate cut, the U.S. interest rate is the highest among G7 countries.
| Country | Central Bank Policy Rate |
|---|---|
| U.S. |
4.00%–4.25% |
| UK |
4.00% |
| Canada |
2.50% |
| Germany, France, and Italy |
2.00% |
| Japan |
0.50% |
Data as of September 17, 2025.
This means that borrowing costs remain relatively high, though loan rates may ease somewhat with the latest cut.
It also means that the U.S. may deliver the highest returns for conservative investors. This will drive higher demand for American currency as investors purchase U.S. bonds, meaning the U.S. dollar is likely to remain strong. Exporters will face headwinds, while importers get some relief from a strong dollar but higher costs from tariffs.
Stay in tune with your company’s spending with Terzo’s AI-powered financial platform.
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