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 came amid mixed economic signals and continued pressure from political figures to ease monetary policy.
The FOMC’s move followed a September rate reduction, with Fed Chairman Jerome Powell signaling earlier this year that tighter rates might be necessary due to signs of a weakening labor market. At the Jackson Hole summit in August, Powell highlighted data suggesting the economy required adjustments to its policy stance.
Recent Bureau of Labor Statistics revisions revealed a significant downward correction in job growth figures between April 2024 and March 2025, reducing the total by 911,000 positions. This revision cast doubt on earlier optimism about economic strength, with August’s jobs report showing only 22,000 new positions added.
President Donald J. Trump had long advocated for rate cuts, warning of risks to economic growth if the Fed maintained restrictive policies. The latest decision, while anticipated by many economists, triggered short-term market fluctuations, reflecting ongoing uncertainty about the central bank’s path forward.
