US Federal Reserve has cut its benchmark interest rate by 0.25 percentage points, bringing the federal funds rate to its lowest level since early 2022. The new target range now stands at 3.5 to 3.75 percent, down from 3.75 to 4 percent.
This is the Fed’s third consecutive rate cut since September, totalling a 0.75 percentage point reduction this year. The move comes amid slowing job growth and persistent inflation, despite delays in key economic data due to the recent government shutdown.
The Federal Open Market Committee said it will carefully assess incoming data and risks before making further adjustments. Officials forecast inflation, measured by the Personal Consumption Expenditures index, to ease to 2.4 percent in 2026, while economic growth is expected to rise to 2.3 percent and unemployment to remain at 4.4 percent.
The decision was not unanimous. Fed Chair Jerome Powell and eight members voted for the quarter-point cut, while three members dissented, the highest number in six years.