The Fed cut its benchmark interest rate by 0.25 percentage points at the latest meeting, bringing the federal funds target range to 3.75%–4.00%. This was the second consecutive cut in 2025, following a 25 basis point reduction in September, and marks the lowest policy rate level in several years. The decision was made amid signs of cooling inflation and softer labor-market momentum, though policymakers remained mindful of data gaps due to ongoing data releases and, at times, a constrained view of the labor market.
