The Federal Reserve cut its benchmark interest rate by 25 basis points on Wednesday, marking its second consecutive reduction to counter slowing job growth. The central bank also announced plans to halt the shrinkage of its balance sheet on December 1, concluding a process that began in 2022.
- The Federal Open Market Committee voted 10–2 to lower the federal funds rate target range to 3.75%–4%.
- Governor Stephen Miran dissented in favor of a larger 50-basis-point cut, while Kansas City Fed President Jeff Schmid opposed any reduction.
- Officials described economic growth as “moderate” and inflation as “somewhat elevated.”
- The Fed said it will stop reducing its balance sheet on December 1, after shedding over $2 trillion in Treasuries and mortgage-backed securities since 2022.
- The decision follows signs of a cooling labor market and limited access to economic data due to the ongoing government shutdown.
- Markets reacted with Treasury yields and the U.S. dollar moving higher, while the S&P 500 held gains.
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Editor’s Note: This is a developing story. This article may be updated as more details become available.
