US Fed Implements Third Rate Cut of 2025

(MENAFN) The US Federal Reserve reduced its key federal funds rate by 25 basis points on Wednesday, bringing it to a target range of 3.5% - 3.75%, in line with widespread expectations.

This adjustment represents the third and final rate reduction of 2025, following a period in which the Fed maintained the rate steady for five consecutive meetings before lowering it in September.

The central bank indicated that current data points to economic activity expanding at a moderate pace.

"Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments," the Fed noted.

It also highlighted that inflation has risen since earlier in the year and continues to be "somewhat" elevated.

The Fed explained that the Federal Open Market Committee (FOMC), responsible for setting interest rates, aims to achieve maximum employment while maintaining inflation at a 2% rate over the long term.

"The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months," it stressed.

In determining the scale and timing of further changes to the policy’s target range, the FOMC will "carefully" evaluate new data, the shifting economic outlook, and the balance of potential risks.

"The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis," it concluded.

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