The Federal Reserve cut interest rates for the second time this year, lowering the rate by a quarter point.
In a 10-2 vote, the Federal Open Market Committee lowered the borrowing rate to a new range of 3.75%-4%. Those voting against the action were Fed Gov. Stephen Miran, who preferred a half-point reduction, and Kansas City Fed President Jeffrey Schmid, who preferred no change to the policy rate.
“Available indicators suggest that economic activity has been expanding at a moderate pace,” the Federal Reserve said in a statement. “Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.”
“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 percent,” the statement added. “In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”
The Federal Reserve cut interest rates for the first time in 2025 in September. “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 4 to 4‑1/4 percent,” the Federal Open Market Committee (FOMC) said at the time.
