US Fed Meeting: The Jerome Powell-led US Federal Reserve’s Federal Open Market Committee (FOMC) in its October 2025 policy decision announcement decided to cut the key benchmark interest rates by 25 basis points to the range of 3.75% to 4.00%, according to the official data released on 29 October 2025.
The US central bank’s move to cut the interest rates for the second time comes amid elevated levels of inflation in the country and a full-scale US government shutdown, resulting in the lack of economic data for the Fed to analyse.
The October 25 bps interest rate cut comes after the FOMC cut the key rates for the first time in September 2025. The committee had kept the interest rates unchanged since December 2024.
5 key highlights from US Fed’s policy decision
Here are five key highlights from the US Federal Reserve‘s policy decision and Chairman Jerome Powell’s speech from 29 October 2025:
1. Fed cuts key interest rates
The US Federal Reserve cut the key interest rates by 25 bps as the committee retains its plans to keep evaluating incoming economic data to gauge the economic outlook of the country for any future rate cut for the US economy.
Out of the total 12 members in Fed’s FOMC, ten members voted in favour of the current monetary policy action, while one was seeking a 50 bps rate cut and another wanted to keep it unchanged, bringing the policy decision’s ratio to 10:2.
“In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 per cent,” the FOMC announced on Wednesday.
2. Will there be a December rate cut?
On the topic of markets anticipating an interest rate cut in December 2025, the US Fed Chairman Jerome Powell said that a future rate cut is not a ‘foregone conclusion’ and that the reality is different.
“A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it,” Powell said.
He also clarified that the committee has not made ‘a decision about December’ and reiterated their stance on analysing incoming data.
A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.
“Strong views across the committee, there were strongly different views today. And the takeaway from that is that we haven’t made a decision about December, and we’re going to be looking at the data that we have, how that affects the outlook and the balance of risks,” said the Fed Chairman.
3. Inflation concerns
Powell, in his media address, also addressed that the inflation in the US economy has picked up due to the rise in goods prices in the country.
“Readings are higher than earlier in the year, as inflation for goods has picked up,” said Jerome Powell.
The consumer inflation data released earlier in October showed that the CPI inflation rose to 3% in 12-month-ended on September 2025, compared to its earlier level of 2.9% in August 2025.
The US Fed Chairman attributed the rise in CPI inflation due to the raging tariffs imposed by President Donald Trump on the import of foreign goods into the United States.
“You’ve seen goods prices increasing, and that’s really due to tariffs, and that’s due that’s compared to a longer run trend of very, very mild deflation in goods. So that’s moving inflation up…” he said.
4. Supply resulting in labour market slowdown?
The US Fed’s FOMC said that the job growth in the US economy has ‘slowed’ in 2025, and even the unemployment rate has increased, but still remains low through August.
“Job gains have slowed this year, and the unemployment rate has edged up but remained low through August,” they said.
Fed Chairman Jerome Powell said that the labour market is witnessing a slowdown due to the sharp drop in immigration numbers after Trump cracked down on illegal immigrants in the United States.
“The supply of workers has dropped very sharply due to mainly immigration but also lower labour force participation. So, that means there’s less need for new jobs, because there isn’t this flow into the pool of labour that you know, where people need jobs, because there aren’t those people now, so there’s not a supply of workers showing up for jobs,” said Powell.
5. Uncertainty in economic outlook
As the central bank aims to keep its focus on the balance of risk and the evolving outlook of the US economy, the Fed also acknowledged that there is uncertainty in the nation’s future outlook.
“Uncertainty about the economic outlook remains elevated,” said the Fed’s FOMC in its statement.
Keeping the uncertainty factor in account, the FOMC committee plans to achieve maximum employment and bring inflation down to 2% in the US market.
“In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” said the Federal Reserve.
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