US Federal Reserve lowered interest rates for the second straight month on Wednesday amid growing uncertainty about US economy.
The Federal Open Market Committee (FOMC) cut its benchmark rate by a quarter percentage point to a range of 3.75% to 4%. The decision passed by a 10-2 vote, with Fed Governor Stephen Miran advocating for a deeper 0.5-point cut and Kansas City Fed President Jeffrey Schmid preferring to hold rates steady.
After months of resisting pressure from President Trump to ease policy, the Fed began lowering rates in September and indicated plans for at least one more reduction before year’s end.
Wednesday’s decision, however, came under unusual circumstances. The ongoing government shutdown has halted the release of crucial federal economic data, forcing the Fed to act without an October jobs report from the Bureau of Labor Statistics. “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,” said the US Fed’s FOMC in its official statement.
Instead, officials relied on private-sector data, a delayed consumer price index, and the Fed’s own surveys of businesses and nonprofits to assess the economy’s health.
Despite the lack of official data, markets widely anticipated the cut as the central bank navigates a tricky economic landscape. The labour market has weakened notably in 2025, adding an average of just 29,000 jobs per month, while the unemployment rate has climbed to 4.3% from 4% in January, the slowest pace of hiring since the pandemic.
Meanwhile, inflation has been edging higher, reaching an annual rate of 3% in September, according to the most recent CPI data.