International News 18 September 2025
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Fed Cuts Rates as Growth Risks Outweigh Inflation Concerns
The US Federal Reserve cut its benchmark interest rate by 25 basis points to 4%–4.25% on Wednesday (Sept 17, 2025), marking its first rate reduction since December 2024. Policymakers signaled two additional cuts of the same size are likely this year, reflecting rising concerns over slowing job growth and higher unemployment. Most Fed officials appointed by President Donald Trump backed the move, while new Governor Stephen Miran opposed the decision, favoring a larger 50-basis-point cut. The Fed’s statement highlighted that job gains have slowed and unemployment has risen, indicating greater downside risks to its dual mandate. Fresh economic projections showed inflation is expected to end 2025 at 3%, above the 2% target but unchanged from June’s forecast, while unemployment is seen at 4.5% and growth slightly higher at 1.6%. Officials increasingly believe Trump’s trade tariffs will have only a temporary effect on inflation, allowing for faster rate cuts without sparking stagflation. The move, supported by Fed Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman, signals a shift toward a more accommodative stance aimed at cushioning the labor market while letting inflation ease gradually in 2026.
Google Commits £5 Billion Investment in UK Amid Trump Visit
Google announced a new £5 billion (US$6.8 billion) investment in the UK ahead of US President Donald Trump’s state visit, which is expected to showcase a series of business deals and partnerships. The investment includes the launch of a new data center near London to meet rising demand for AI-powered services such as Google Cloud, Search, Maps, and Workspace. The company projects the initiative will create 8,250 jobs annually across various UK businesses. UK Chancellor Rachel Reeves called the move a strong vote of confidence in the country’s economy and its partnership with the US, while Prime Minister Keir Starmer’s Labour government views it as a boost to private investment amid sluggish economic growth. The announcement coincides with expectations of over US$10 billion in broader economic agreements during Trump’s visit, reinforcing ties between the two allies. Google also unveiled a partnership with Shell to support energy transition efforts, with its Waltham Cross data center designed to recycle heat for local use and reduce water consumption. Together with clean energy initiatives, Google expects its UK operations to reach 95% carbon-free energy by 2026, underscoring its sustainability commitment while expanding technological infrastructure in the region.
South Korea’s KOSPI Rises on Fed Rate Cut and Chipmaker Rally
South Korea’s benchmark KOSPI index opened higher on Thursday (Sept 18, 2025), climbing 0.38% to 3,426.37, supported by strong gains in major chip stocks after the US Federal Reserve cut interest rates for the first time since December. The Fed’s move, coupled with signals of further rate reductions, boosted market sentiment despite recent concerns over a weakening US labor market. Samsung Electronics rose 1.21% and SK Hynix surged 3.60%, extending optimism around AI-driven semiconductor demand. Other sectors showed mixed performance, with LG Energy Solution slipping 0.43%, Hyundai Motor edging up 0.12%, and Kia gaining 0.30%. Among 920 traded stocks, 462 advanced and 376 declined, while foreign investors recorded net sales worth 116.9 billion won (US$84.5 million). The Korean won weakened 0.48% to 1,383.0 per dollar, while government bond yields rose slightly across maturities. Authorities said they are closely monitoring global risks, including US tariff policies and broader economic uncertainty, and stand ready to act if needed.