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The Federal Reserve on Thursday cut interest rates by 0.25 percentage points for the second consecutive meeting, bringing the target range to 4.50% to 4.75%, as expected. The decision was unanimous.
In its statement, the Fed noted that economic activity continued to expand at a steady pace. While the previous statement referred to a slowdown in the monthly pace of job growth, this time, the Fed spoke more generally about the labor market. Unemployment remains low, but conditions in the job market are slowing down, the Fed said.
The central bank assessed the risks to both the labor market and inflation as "balanced," echoing language from its September meeting. It also adjusted its inflation rhetoric slightly, noting that price pressures have "made progress" toward the Fed's target.
The personal consumption expenditures (PCE) index, which excludes food and energy prices, remained unchanged at 2.6% year-on-year in September. The Fed maintained its previous stance on the economic outlook, describing it as "uncertain."
The Fed's announcement comes in the wake of former President Donald Trump's return to the White House in January after his victory in the U.S. presidential election. Trump, who defeated Vice President Kamala Harris, ran a campaign promising, among other things, high tariffs on imports and stricter immigration controls, which could have unpredictable impacts on the economic landscape monitored by the Fed.
Investors, following Trump's electoral victory, had already scaled back bets on the central bank being able to lower interest rates as much as previously anticipated.
