The Federal Reserve cut its benchmark interest rate by 25 basis points on Wednesday, the second cut of 2025, saying the move reflects a softer labour market and a gradual easing of inflationary pressure. Federal Reserve+1
In a brief statement, the Fed said implementation steps would follow its October policy decision and that officials will continue to monitor incoming data before deciding on future moves. Chair Jerome Powell stressed the Fed’s goal is to support a sustainable recovery while keeping inflation on target. Federal Reserve
Markets reacted quickly: bond yields fell and equity futures showed volatility as traders re-priced expectations for further rate cuts. Economists say the central bank cut reflects weaker payroll gains and signs the labour market is no longer running as hot as earlier in the year. Reuters+1
Policymakers signalled there remains uncertainty about the path ahead. Some Fed officials warned that additional moves will depend on how consumer spending, wages and price trends evolve in the coming months. For households and businesses, the immediate effect is typically lower borrowing costs on some loans, though mortgage rates can lag other market changes. Federal Reserve+1
Quick context
The cut follows a series of weak jobs reports and evidence of slowing wage growth, which gave the Fed room to ease policy without risking a near-term rebound in inflation. Analysts expect careful communication from the Fed to prevent market overreaction. Reuters+1