The US Federal Reserve has once again lowered interest rates amid growing concerns about a faltering labor market, even as inflation worries have taken a backseat. This marks the second rate cut of 2025 and drops the key lending rate to a range of 3.75% to 4%, its lowest level in three years.
The decision came despite limited access to official economic data caused by the ongoing government shutdown nearing its one-month mark. This has left central bankers “flying blind” regarding the true state of the job market, forcing them to rely on alternative data sources. Private sector reports, like those from payroll firm ADP, indicated that the US economy lost 32,000 jobs in September, highlighting a slowdown in hiring.
At the Federal Open Market Committee (FOMC) meeting, the rate cut vote was not unanimous. Stephen Miran, a new Fed governor on leave from the White House Council of Economic Advisers, pushed for a larger 0.5-percentage-point reduction, while Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, preferred to keep rates steady.
Federal Reserve Chair Jerome Powell described the labor market as “less dynamic and somewhat softer” than earlier in the year, partly due to reduced immigration, but said the slowdown did not appear to be accelerating.
Also Read:
In Texas, a Deadly Measles Outbreak Does little to Dispel Vaccine Skepticism
