Fed Cuts Rates by Quarter Point, Casts Doubt on Further Cut in '25

Washington, DC, October 29, 2025-"The Federal Reserve lowered interest rates at its second consecutive meeting, but Chair Jerome Powell cast doubt on expectations of a further rate cut this year,” reports the Wall Street Journal.

“Powell made an unusually pointed intervention at a news conference following the meeting Wednesday to push back against market expectations that a rate cut at the Fed’s next gathering in December was a foregone conclusion. ‘Far from it,’ he told reporters.

“The latest quarter-point cut will reduce the Fed’s benchmark short-term interest rate to a range between 3.75% and 4%, the lowest setting in three years and down from a peak of around 5.4% that the central bank maintained for much of last year. The cut was made to extend an effort to prevent a recent slowdown in hiring from turning into something more serious.

“Powell’s comments underscored how the easiest part of unwinding the central bank’s aggressive rate increases might be over as he navigates a committee with what he identified as a ‘growing chorus’ of officials who are wondering whether further cuts are warranted.

“That thorny task has been complicated by a data blackout resulting from the government shutdown. If officials continue to face a very high level of uncertainty about the economic outlook because the shutdown keeps the Fed in a data blackout ahead of its next meeting, ‘that could be an argument in favor of caution’ about cutting again.

“The Fed approved the rate cut on a 10-2 vote. Kansas City Fed President Jeffrey Schmid voted against the decision because he favored no change in rates, while Fed governor Stephen Miran dissented in favor of a larger, half-point cut.

“Separately, officials agreed to stop their 3½-year campaign to shrink the Fed’s $6.6 trillion asset portfolio on Dec. 1. That effort had been designed to unwind pandemic stimulus passively.”