US Federal Reserve Announces Third Rate Cut of the Year, Highlights Worries Over Employment
The most recent 25-basis-point cut brings rates down to 3.50%–3.75%, the lowest in close to three years
Fed Eases Rates Amid Rising Job-Market Pressures
For the third time in 2025, the US Federal Reserve has cut interest rates, taking its key policy rate down to a range of 3.50% to 3.75%. The move reflects the growing unease of the central bank at the slowing job market, even as inflation stays higher than preferred.
The rate-cut vote showed division among policymakers, with one member pushing for a sharper half-percentage-point cut and two others feeling rates should stay where they are. It shows how divided the Fed is in trying to balance its control of inflation with supporting payrolls in a cooling economy.
Along with announcing the cut, the Fed revised its 2026 GDP growth forecast upward to 2.3 percent. At the same time, however, it signaled an increased risk to the job market, which could portend further policy adjustments based on future economic indicators.
Taken together, the move shows how the Fed is shifting more towards monetary easing for labour market protection. Yet, ongoing inflation pressures, coupled with internal disagreements, suggest any future rate cuts would be cautious ones.
