The Federal Reserve announced on October 29, 2025, that it will lower the target range for the federal funds rate by a quarter percentage point to 3-3/4 to 4 percent. This decision comes as recent data indicate that economic activity continues at a moderate pace, while job gains have slowed and unemployment has slightly increased but remains low through August.
The Federal Open Market Committee (FOMC) noted that inflation has risen since earlier in the year and remains somewhat elevated. The statement explained: “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.”
In response to these conditions, the FOMC also decided to conclude reductions in its aggregate securities holdings on December 1. The committee stated: “In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”
The FOMC emphasized ongoing monitoring: “In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
Voting for this action were Jerome H. Powell (Chair), John C. Williams (Vice Chair), Michael S. Barr, Michelle W. Bowman, Susan M. Collins, Lisa D. Cook, Austan D. Goolsbee, Philip N. Jefferson, Alberto G. Musalem, and Christopher J. Waller.
Two members dissented: Stephen I. Miran preferred a larger rate cut by half a percentage point; Jeffrey R. Schmid favored no change.
For further information or media inquiries regarding this decision or other Federal Reserve activities, contact details are available through official channels.
