Wed, 29 Oct 2025

Wed, 29 Oct 2025 Fed cuts US interest rates again despite 'flying blind'

Central bank votes to lower cost of borrowing even as US government shutdown limits data for decision

* The Federal Reserve has cut interest rates by 0.25 percentage points, bringing the target rate down to 3.75-4%.
* This is despite concerns over inflation, which remains above the Fed's 2% target.
* The decision was driven by a slowdown in job hiring and a weakening labor market, with unemployment edging up.
* Fed Chair Jerome Powell said the labor market is "less dynamic and somewhat softer" than earlier this year, pointing to lower immigration as a factor.
* The government shutdown has delayed official data, leaving central bankers "flying blind" about the job market.
* The Fed's balance sheet unwinding process will stop in December, amid signs of stress in financial markets.
* Future interest rate cuts are becoming more contentious, and economists expect the Fed to slow the pace of cuts from here.
* Powell signaled that a December cut is not guaranteed, saying it's "far from a foregone conclusion".
* The decision was approved by 9-2, with two members voting for a larger cut or no cut at all.
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