Federal Reserve cuts rates by a quarter point

The Federal Reserve on Wednesday lowered the federal funds target range by 25 basis points to 3.50%-3.75%, citing moderate economic expansion and signs of cooling in the labour market.

Employment growth has slowed through the year, and the unemployment rate has edged higher into September, while inflation remains elevated compared with early 2025.

The Federal Open Market Committee (FOMC) said uncertainty around the economic outlook remains high and noted an increase in downside risks to employment in recent months.

The Fed reaffirmed its commitment to achieving maximum employment and returning inflation to its 2% goal, adding that it will closely assess incoming data, evolving conditions and the balance of risks when considering further rate adjustments.

The central bank also stated it stands ready to purchase short-term Treasury securities if needed to ensure reserves remain ample across the financial system.

The decision passed with nine votes in favour, while three members dissented—two preferring to leave rates unchanged and one pushing for a deeper 50-basis-point cut.