Federal Reserve Cuts Interest Rate by 25 Basis Points

The Federal Reserve has lowered the federal funds rate by a quarter percentage point to a target range of 3.50%–3.75%, citing moderate economic growth, slower job gains, and a slight rise in unemployment through September. Inflation has increased since earlier this year and remains somewhat elevated. The Fed noted that uncertainty about the economic outlook remains high and that downside risks to employment rose in recent months. The decision reflects the Fed's efforts to balance its dual mandate of achieving maximum employment and maintaining inflation at 2%. The move is the Fed's third rate cut this year, and the Committee will continue to monitor labor market conditions, inflation pressures and expectations, and financial and global developments. The Committee judged that the reserve balances have fallen to ample levels and will begin buying shorter-term Treasury securities to maintain that supply. Nine policymakers voted in favor of the decision, while three dissented, with Stephen Miran seeking a larger 0.5% cut, and Austan Goolsbee and Jeffrey Schmid preferring no change.