Fed Reserve cuts rates by quarter point
The Federal Reserve cut its key interest rate again on Wednesday, the rate went from 4.1% to about 3.9%. Fed Reserve Chair Jerome Powell spoke to the press following the Fed’s second rate cut of 2025.
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The Federal Reserve cut its key interest rate on Wednesday.
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By the numbers:
The rate went from 4.1% to about 3.9%. The central bank had cranked its rate to roughly 5.3% in 2023 and 2024 to combat the biggest inflation spike in four decades
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Big picture view:
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The Fed stayed course on its expected cut despite missing government data clouding the view of the economy amid the shutdown.
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The missing hiring and inflation data that has not been released during the shutdown raises risks for the Fed because the agency is widely expected to keep cutting rates in an effort to shore up growth and hiring.
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What’s next:
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The third rate cut this year is expected in December.
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Meanwhile:
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Fed officials say they are monitoring a range of other data, including some issued by the private sector, and don’t feel handicapped by the lack of government reports.
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READ MORE: Fed rate cuts: What they mean for you
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What they’re saying:
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“Job gains have slowed this year, and the unemployment rate has edged up but remained low through August,” the Fed said in a statement issued Wednesday. “More recent indicators are consistent with these developments.”
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Why you should care:
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A key rate cut could benefit consumers by bringing down borrowing costs for mortgages and auto loans.
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For example:
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Since Fed chair Jerome Powell strongly signaled in late August that rate cuts were likely this year, the average 30-year mortgage rate has fallen to about 6.2% from 6.6%.
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The Source: Information in this article was taken from The Federal Reserve’s Oct. 29, 2025, meeting, as reported by The Associated Press. Background information was taken from The Associated Press. This story was reported from Detroit.
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