UPDATE: The Federal Reserve has just announced a significant change to its monetary policy, cutting the target range for the federal funds rate by 0.25 percentage points to 3.75% to 4.25%. The decision, released at 2:00 p.m. EDT on October 29, 2025, comes as the economy shows signs of slowing growth and rising inflation.
Latest indicators reveal that economic activity has moderated through the first half of the year, with job gains slowing and the unemployment rate edging slightly higher, although it remains low. These factors prompted the Committee to reassess its approach, as uncertainty about the economic outlook continues to loom large.
The Federal Open Market Committee (FOMC) expressed concerns over the rising downside risks to employment, indicating a cautious stance moving forward. In light of these developments, the Committee confirmed its commitment to achieving maximum employment and maintaining inflation at a target rate of 2% over the long run.
Jerome H. Powell, the Chair of the Federal Reserve, along with John C. Williams, the Vice Chair, and other voting members, emphasized the need to adapt to evolving economic conditions. The decision to lower the target range reflects a proactive approach to navigate potential challenges ahead.
The Committee has also announced plans to conclude reductions in its holdings of Treasury securities and agency mortgage-backed securities by December 1, 2025. This move aims to stabilize the financial environment while closely monitoring labor market conditions and inflation pressures.
Voting for this monetary policy adjustment were Powell, Williams, and several others, while Stephen I. Miran voted for a more aggressive cut of 0.50 percentage points, and Jeffrey R. Schmid preferred to maintain the current target range.
As the Federal Reserve acts to support the economy, market analysts and investors are closely watching the implications of this decision. The urgency of the situation underscores the necessity for the public and businesses to stay informed about these critical changes in monetary policy.
The Federal Reserve’s latest actions highlight the balancing act of fostering economic growth while controlling inflation. Stakeholders must remain vigilant as the Committee prepares to respond to any emerging risks that could impact its goals.
As developments unfold, readers are encouraged to share this urgent news with others to stay updated on the ever-changing economic landscape.
