The Federal Reserve approved a quarter-point interest rate cut Wednesday, the first in nine months, with officials judging that recent labor-market softness outweighed setbacks on inflation. A narrow majority of officials penciled in at least two additional cuts this year, implying consecutive moves at the Fed’s two remaining meetings in October and December. Across the pond, the Bank of England left its key interest rate unchanged Thursday, but scaled back a program designed to shrink its holdings of government bonds that has attracted increased scrutiny as yields have risen.

When the Federal Reserve cut interest rates Wednesday, it looked like routine monetary policy. Markets largely shrugged, and Chair Jerome Powell mostly avoided acrimonious dissents over a decision that came amid unprecedented political confrontation.

The pivot he began with Wednesday’s reduction might represent Powell’s last stand to prove an independent U.S. central bank can navigate complex crosscurrents before appointees more aligned with President Trump’s priorities assume greater control. Powell’s term as chair ends in the spring.

• Fed Lowers Rates by Quarter-Point, Signals More Cuts Are Likely
• The Fed Rolls Back Recession Risk

• What Decides Where Mortgage Rates Go From Here

A decision is expected Thursday from the U.S. Securities and Exchange Commission on a new exchange that could shake up the options market. It has a bunch of proponents and some big opponents. The new exchange would bring to options the same “speed bump” entrance ramp that IEX Markets uses in its stock exchange. That speed bump is IEX’s way of protecting institutional traders from being outraced by deep-pocketed, computerized rivals. (Barron's)

7 a.m.: UK interest rate decision
8:30 a.m.: Philadelphia Fed Business Outlook Survey
8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
10 a.m.: Leading Indicators

5 a.m.: Japan Monetary Policy Meeting decision
1 p.m.: FRB San Francisco President Mary Daly speaks at AI Implications for Workforce Development and Economic Mobility event
7 p.m.: U.S. President Donald Trump and Chinese President Xi Jinping discuss TikTok ownership

One major change to the Fed's verbiage in its written policy statement: a gloomier view of the labor market after two successive months of downbeat jobs reports. "Job gains have slowed, and the unemployment rate has edged up but remains low," the Fed's policy committee says, removing a note in the July statement that said, "labor market conditions remain solid." The committee adds another new phrase too, judging that "downside risks to employment have risen." That assessment helps justify the Fed's first quarter-point rate cut of 2025, despite stubborn inflation. — Matt Grossman

• The tariff-fueled surge of cargo into America’s busiest port complex is over. The ports of Los Angeles and Long Beach in August handled 944,832 import containers, measured in 20-foot equivalent units.
• The European Central Bank might not have completed a series of rate cuts that began in June 2024, Vice President Luis de Guindos said Thursday.
• The tariffs on imports of goods set by the U.S. following talks with the European Union pose less of a threat to the future growth of the Irish economy than had been feared, the country’s central bank said Thursday.
• European governments had been pressuring Trump to impose stronger sanctions on Russia. Then Trump flipped the script, challenging them to halt purchases of Russian oil and put tariffs on India and China. Now, European leaders are struggling to come up with a response.
• Australia’s unemployment rate remained near historic lows in August, with the economy recently showing signs of a tentative recovery supported by falling interest rates and rising consumer spending.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.