{"id":80923,"date":"2025-10-29T22:57:59","date_gmt":"2025-10-29T19:57:59","guid":{"rendered":"https:\/\/www.nationalturk.com\/en\/?p=80923"},"modified":"2025-10-29T22:57:59","modified_gmt":"2025-10-29T19:57:59","slug":"fed-cuts-us-interest-rates-again-amid","status":"publish","type":"post","link":"https:\/\/www.nationalturk.com\/en\/fed-cuts-us-interest-rates-again-amid\/","title":{"rendered":"Fed cuts US interest rates again amid data blackout and rising job worries"},"content":{"rendered":"

The Federal Reserve moved to cut interest rates for the second consecutive month, bringing the federal funds target range down to 3.75\u20134%, as concerns over a cooling job market outweighed inflation fears. The decision, made during a period when the US government shutdown halted key data releases, left central bankers navigating the economy \u201cflying blind.\u201d<\/p>\n

Labor concerns drive the decision<\/strong><\/h2>\n

The Fed<\/a>\u2019s move follows signs of a slowdown in hiring and rising unemployment. Private-sector payroll data showed the US economy lost 32,000 jobs in September, though the official employment report has been delayed due to the shutdown.<\/p>\n

In its policy statement, the Fed said, \u201cJob gains have slowed this year,\u201d adding that the unemployment rate has \u201cedged up slightly.\u201d The bank reiterated its commitment to supporting maximum employment while keeping inflation near its 2% target.<\/p>\n

Split votes within the Fed<\/strong><\/h3>\n

Two members dissented from Wednesday\u2019s decision. Stephen Miran, currently on leave from President Donald Trump\u2019s Council of Economic Advisers, voted for a larger 0.5-point cut, while Jeffrey Schmid, President of the Kansas City Fed, preferred to keep rates unchanged.<\/p>\n

The Fed also announced it will end balance sheet reduction on December 1, reinvesting proceeds from mortgage-backed securities into Treasury bills to maintain liquidity.<\/p>\n

Inflation remains elevated but stable<\/strong><\/h4>\n

Inflation stood at 3% year-over-year in September, slightly below forecasts but still above the Fed\u2019s 2% goal. The statement noted that \u201cinflation has risen since the start of the year and remains somewhat elevated,\u201d while disinflation continues in the services sector.<\/p>\n

\u201cAlthough inflation remains above target, the Committee remains attentive to downside risks to the employment mandate,\u201d the FOMC said.<\/p>\n

Powell: \u201cShutdown will temporarily affect growth\u201d<\/strong><\/h3>\n

Speaking after the decision, Fed Chair Jerome Powell said the data before the government shutdown suggested the economy was on a \u201cstronger trajectory,\u201d but acknowledged that prolonged disruptions could weigh on growth:<\/p>\n

\u201cThe government shutdown will temporarily slow economic activity, but the effects should reverse once it ends.\u201d<\/p>\n

Powell added that labor demand continues to soften while long-term inflation expectations remain \u201cbroadly consistent\u201d with the Fed\u2019s goal.<\/p>\n

Markets expect one more cut this year<\/strong><\/h3>\n

Wall Street investors are betting on another quarter-point rate cut in December, with CME FedWatch data showing more than an 80% probability of another move before year-end.<\/p>\n

However, economists warned that upcoming labor reports could reshape market expectations ahead of the next meeting.<\/p>\n

President Donald Trump has continued to pressure Powell for faster rate cuts and recently suggested he could replace the Fed Chair before his term ends in May 2026.
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