UPDATE: The Federal Reserve has just announced a significant policy shift, lowering the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4-1/4 percent. This urgent decision, made public at 2:00 p.m. EDT on October 29, 2025, reflects growing concerns over a moderating economic outlook.
Recent indicators show that economic activity has slowed over the past year, with job gains diminishing and the unemployment rate experiencing a slight uptick, though it remains relatively low. The Federal Reserve cautions that uncertainty surrounding the economic landscape is currently elevated, necessitating this proactive response to ensure maximum employment and maintain inflation targets.
In the statement, Jerome H. Powell, Chair of the Federal Reserve, emphasized the need to support the economy amid shifting risks. “The Committee is attentive to the risks to both sides of its dual mandate,” he stated, highlighting that downside risks to employment have notably increased in recent months.
Inflation has also been a pressing concern, having risen since early 2025 and remaining somewhat elevated. The Federal Reserve aims to return inflation to its target rate of 2 percent over the long run, which further underscores the urgency of this monetary policy adjustment.
As part of its strategy, the Federal Reserve will continue to evaluate incoming data and the evolving economic outlook. The decision to conclude the reduction of its holdings of Treasury securities and agency mortgage-backed securities will take effect on December 1.
The voting on this monetary policy action included a majority in favor, with Powell leading the charge. Notably, dissent came from members Stephen I. Miran, who advocated for a 1/2 percentage point cut, and Jeffrey R. Schmid, who preferred to maintain the current target range.
This development is significant for millions of Americans as it directly impacts borrowing costs, savings rates, and overall economic stability. As the Federal Reserve navigates these turbulent waters, its decisions will have far-reaching implications for businesses, consumers, and the broader economy.
Stay tuned for further updates as this story develops, and understand how these changes may affect your financial landscape.
