The Federal Reserve has announced a 25 basis point interest rate cut, bringing the federal funds rate to a range of 3.75%–4.00%. This marks the second federal reserve interest rate cut of the year, aimed at supporting the slowing US economy amid mixed inflation data and weaker job growth. The decision came after a closely watched FOMC meeting where policymakers debated the balance between inflation control and economic stability.
US Federal Reserve Decision: What Jerome Powell Said
During the post-meeting press conference, Fed Chair Jerome Powell stated that the move reflects concerns about softer employment figures and slower consumer spending.
He clarified that while inflation has eased compared to last year, “the path ahead remains uncertain.” Powell mentioned that due to limited government data during the recent shutdown, the Fed was “operating with less visibility,” making it harder to predict future policy actions.
Powell emphasized that this rate cut should not be interpreted as the start of an aggressive easing cycle. “We will continue to monitor data carefully,” he said, hinting that the next steps depend on incoming economic signals.
US Fed Rate Cut Key Details
- The Fed reduced the interest rate by 25 bps to a target range of 3.75%–4.00%.
- This is the second us fed rate cut in 2025, following one earlier this year.
- Two policymakers dissented—one preferred a 0.50% cut, while another wanted no change.
- The central bank also decided to pause its balance sheet reduction program starting December.
- Fed officials noted that inflation remains slightly above the 2% target, but growth risks are rising.
Impact On Stock Market
The fed rate cut news had an immediate reaction across Wall Street. The Dow Jones and Nasdaq opened higher after the announcement, with investors cheering the potential for cheaper borrowing and improved liquidity. However, the optimism was short-lived as Powell’s cautious tone signaled that future cuts are “not guaranteed.”
In the short term, rate-sensitive sectors such as technology, real estate, and banking may see increased volatility. Traders at forex factory and other financial platforms noted a mild weakening of the US dollar following the fomc meeting today. Analysts expect that if inflation continues to trend lower, another us fed meeting in early 2026 could bring further policy adjustments.
Why This Matters for Global Investors
The fed interest rate decision is not only vital for the US but also for emerging markets like India.
Lower US rates often encourage capital inflows into developing economies, potentially benefiting markets such as the Nifty and Sensex.
However, investors should remain cautious as volatility tends to rise around major fomc meetings.
Disclaimer
This article is for informational purposes only. It should not be considered financial or investment advice. Market reactions depend on several macroeconomic factors, and investors should consult financial professionals before making trading or investment decisions.
Frequently Asked Questions (FAQs)
Q1: What is the latest US Fed rate cut news?
The Federal Reserve has cut its key interest rate by 25 basis points, setting the range at 3.75%–4.00%. The decision was made to support the economy amid slower job growth and moderate inflation.
Q2: How does the Federal Reserve interest rate cut affect the stock market?
A lower interest rate generally boosts stock markets by reducing borrowing costs for companies and improving profitability. However, Powell’s cautious comments led to mixed investor sentiment in the short term.
Q3: When is the next FOMC meeting expected?
The next fomc meeting is expected in December 2025. Market participants are watching closely for clues about future fed rate cuts depending on inflation and employment data trends.
