#FOMCWatch

Fed’s ¼-Point Rate Cut: A Delicate Balance Between Jobs and Inflation

The Federal Reserve’s Federal Open Market Committee (FOMC) announced a 0.25 percentage point reduction in its federal funds rate, lowering the band to 3.75%–4.00%.The move — the second consecutive cut this year — reflects a growing concern about a weakening U.S. labour market and the economic fog cast by the ongoing government shutdown, even as inflation remains above the Fed’s 2% target.

While the rate cut sends a clear signal of dovish intent, the Fed made a point of emphasising that further easing is far from guaranteed, given the inflation risks and data limitations. For borrowers and markets alike, this means the easier-money tide may be modest — and the next steps will depend heavily on what the Fed sees in employment and price trends ahead.