The Fed makes its first rate cut of the year

▲ Federal Reserve Chairman Jerome Powell emphasized that there was no support for a federal interest rate adjustment greater than a quarter of a percentage point. Photo: AFP

Clara Zepeda

La Jornada Newspaper, Thursday, September 18, 2025, p. 21

The U.S. Federal Reserve (Fed) announced yesterday the first federal funds rate cut of 2025, following a cooling labor market and confirmation that the trade war initiated by President Donald Trump has not led to a sharp rise in inflation. The monetary authority also anticipated two more cuts this year.

“In support of the objectives (low inflation and full employment) and in light of the shift in the balance of risks, the Federal Open Market Committee (FOMC) decided to lower the target range for the federal funds rate by 0.25 percentage points to between 4 and 4.25 percent,” the Fed reported at the conclusion of its sixth policy meeting of the year.

Finally, the overheating prices have not made an appearance in the United States, and it has been able to cope with trade uncertainty without suffering a new surge in inflation. Added to this, the cooling labor market has given the central bank justification for lowering its benchmark rate.

According to the monetary policy statement, 11 of the 12 Fed voters supported the quarter-percentage-point rate cut. Stephen Miran, the Fed's newcomer and former Trump advisor, favored reducing the federal funds rate target range by half a percentage point at this meeting.

The Fed followed the script by ending the pause in rate cuts that began in January 2025, following the three-cycle cut it maintained in September, November, and December 2024, leaving the rate in a range of 4.25 to 4.5 percent, a level it had already touched in December 2022 and also in December 2007.

Fed Chairman Jerome Powell emphasized that there was insufficient support for a larger adjustment and that a more aggressive move could have unintended effects on financial stability. FOMC participants consider two additional 0.25 percentage point rate cuts possible on October 29 and December 10 of this year, subject to inflation and employment trends, according to the dot plot .

Clara Zepeda

La Jornada Newspaper, Thursday, September 18, 2025, p. 21

After eight days of gains against the dollar, the peso remains at its strongest level since July 2024. Following the outcome of the Federal Reserve's (Fed) monetary policy meeting, where it lowered rates by 0.25 percentage points and anticipates two more cuts this year, the Mexican currency maintained its good streak by registering a gain of 0.23 percent yesterday, closing at 18.3186 pesos per spot dollar. With an accumulated appreciation of 11.3 percent for the year.

U.S. stock markets closed mixed. The S&P 500 fell slightly, 0.10 percent, to 6,600.43 points. Thus, September's gains remained unchanged at 2.2 percent, and 2025's at 12.2 percent. The Nasdaq, meanwhile, fell 0.33 percent to 22,261.33 points. The Dow Jones Industrial Average advanced 0.57 percent to 46,018.32 points.

The Mexican Stock Exchange (BMV) fell 0.81 percent, breaking a three-day winning streak and reaching 61,596.23 points. Despite this movement, the index has accumulated a 4.9 percent increase in September and a 24.4 percent increase so far in 2025.

The price of a barrel of Brent crude for November delivery fell 0.78 percent to $67.95. West Texas Intermediate crude, for October delivery, fell 0.73 percent to $64.05.

Dora Villanueva

La Jornada Newspaper, Thursday, September 18, 2025, p. 22

Ricardo Salinas Pliego's companies are using the judiciary, specifically that of Mexico City, to keep their debts to private individuals frozen indefinitely, according to accusations made by the US investment funds Capital Partners and Contrarian Capital Partners, which are pursuing an international arbitration against the Mexican government for at least $500 million owed to them by TV Azteca.

The investment funds, which initiated proceedings against Mexico in 2023 to claim debt owed by TV Azteca, are seeking "a high-level and effective channel of communication with the Mexican government to be heard and explore an agreement that guarantees a solution to this dispute," sparked by "the same Mexican billionaire, whose companies also owe a massive amount of unpaid taxes to the Mexican government," emphasized Katherine P. Padgett, legal advisor to the plaintiff funds.

"We believe it is not in Mexico's interest to spend taxpayer resources on an action that reads like a defense against illegitimate actions by Mexican courts that have improperly protected a Mexican billionaire (Ricardo Salinas Pliego) and his companies from having to pay legal debt obligations," added Padgett, of the firm Akin Gump Strauss Hauer & Feld LLP.

Since 2023, the Mexican government has been facing arbitration before the World Bank's International Centre for Settlement of Investment Disputes (ICSID), which was filed on the grounds that it is failing to comply with obligations under the USMCA, the North American trade agreement, by not having access to a fair trial.

The case dates back to 2017, when TV Azteca issued bonds, defaulted on them, and in 2022, two years after the coronavirus pandemic began, Salinas Pliego's television station obtained an extension through the Mexico City Judiciary—which is still in place—to avoid fulfilling its obligations to foreign investors.

According to the law firm behind Capital Partners and Contrarian Capital Partners, in 2022, “TV Azteca secretly initiated proceedings before the sixty-third civil court of the Superior Court of Justice of Mexico City, presided over by Judge Miguel Ángel Robles Villegas, requesting that it declare that the COVID-19 pandemic constituted a case of force majeure that prevented TV Azteca from fulfilling its obligations and paying its debts to investors.”

Neither heard nor notified

Robles Villegas—a judge whose term ends on September 30—granted the measure to TV Azteca "without granting a hearing or notifying" the investors; and payment was suspended until the World Health Organization (WHO) declared the end of the pandemic, the law firm claims.

On May 5, 2023, the WHO announced the end of the emergency, but not the end of the pandemic, a nuance that the court used to maintain that "only extraordinary measures were declared over, but there are still cases of the COVID-19 virus." Thus, the obligations of TV Azteca, the same company whose owner, Salinas Pliego, repeatedly opposed the lockdown and downplayed the lethality of the infection, have remained suspended.

In this context, the investor representative asserts that "the arbitration seeks redress for TV Azteca's abusive manipulation of Mexican courts to obstruct the legitimate recovery of $500 million by U.S. investors, an amount that continues to grow."

The firm added that it is seeking to meet with representatives of the federal government to resolve this situation, but has so far received no response.

The case was first reported in 2023, but in October 2024, Grupo Salinas responded: "Vulture funds Cyrus Capital Partners LP and Contrarian Capital Management LLC intend to play the victim in the face of their respective defeats and setbacks in U.S. courts."