The Fed stressed that uncertainty about the economic outlook remained “high”, so the central bank’s governing body continues to monitor the risks to employment and inflation.
Mexico City, October 29 (However).- The Federal Open Market Committee (FOMC) of the Reserva Federal of USA (Fed, for its acronym in English) decided on Wednesday to lower 25 basis points interest rates, up to target range of the 3.75 percent at four percent.
This cut follows the one decreed on September 17 in identical proportion, as well as the five consecutive times starting in January in which the issuing institute kept the price of money frozen. Before that, he lowered the reference rate on three occasions since September 2024.
“Available indicators suggested that economic activity expanded at a moderate pace. Employment growth slowed that year and the unemployment rate increased slightly, although it remained low until August. The most recent indicators are consistent with this evolution. Inflation picked up since the beginning of the year and remained somewhat elevated,” the Fed summarized.
Chair Powell reads opening statement at the #FOMC press conference on October 29, 2025: https://t.co/ZDw8oqy6g3
— Federal Reserve (@federalreserve) October 29, 2025
In your statementthe entity stressed that uncertainty about the economic outlook remained “high”, so the governing body of the central bank continues to monitor the risks that weigh on employment and inflation, especially after seeing an increase in those referring to the labor market.
The FOMC indicated that, when modifying the reference rate, it analyzed in detail the incoming data, the macroeconomic environment and the balance of risks.
The issuing institute assured that it is prepared to adjust rates if necessary, for which it studies the readings of the labor market, inflation and its expectations of future evolution, as well as the effects derived from international and financial events.
On the other hand, the Fed announced the completion of its balance sheet reduction plans as of December 1. Thus, it stopped reinvesting the principals of the debt that matured between Treasury bonds and mortgage securitizations.
Read Chair Powell’s full opening statement from the #FOMC press conference (PDF): pic.twitter.com/AnIGRVRXHV
— Federal Reserve (@federalreserve) October 29, 2025
Voting discrepancies
Wednesday’s decision was not unanimous among FOMC members, as Stephen Miran advocated a 50 basis point cut against the majority. In contrast, Kansas Fed Governor Jeffrey Schmid defended keeping rates unchanged.
Miran’s discrepancy is notable, given that it is part of the open war between the leader of the Fed, Jerome Powell, and Donald Trump, who insisted on lowering the price of money at all costs. Miran was appointed in September by the Republican president to pressure to cut it drastically.
Other governors aligned themselves with Trump’s intention to lower rates, such as the vice president of the supervisory area, Michelle Bowman, and Christopher Waller, who voted in favor of the agreed quarter point.
It should be remembered that Bowman was nominated for her current position by the President, while Waller was in the running to lead the Fed when Powell’s term expired in May 2026.
The post The Fed cuts the reference interest rate by 25 points appeared first on Veritas News.
