The US Federal Reserve, led by Chair Jerome Powell, has reduced its benchmark interest rate by 25 basis points, bringing the federal funds target range down to 3.75%–4.00%. The decision was announced on Wednesday, October 29, 2025, following the conclusion of the central bank’s two-day policy meeting.
Guidance on Future Policy Moves
In its post-meeting statement, the Federal Open Market Committee (FOMC) said that upcoming policy actions would depend on the balance of risks facing the economy, the latest economic indicators, and broader developments in growth and inflation trends.
“In support of its goals and considering the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by ¼ percentage point to 3¾–4 percent,” the statement said.
Inflation and Economic Context
The rate reduction comes amid persistent consumer inflation, with the Consumer Price Index (CPI) rising 3% year-on-year in September 2025, up slightly from 2.9% in August. The move reflects the Fed’s measured approach to sustaining economic growth while addressing inflationary pressures in the economy.
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