What Just Happened On October 29, the Federal Reserve reduced its benchmark federal funds rate by 25 basis points, bringing the range down to 3.75%–4.00%. This marks the second cut in 2025, following a similar move in September. Why? Labor market is showing signs of softening — hiring has slowed, job openings are down, and the unemployment rate ticked up to 4.3%. Inflation, while down from its 2022 peak, remains above the Fed’s 2% target, especially in goods categories affected by tariffs. Government shutdowns have delayed key economic data, forcing the Fed to operate with limited visibility. What Powell Said — And What It Means Fed Chair Jerome Powell described the rate cuts as “insurance” — not an emergency, but…
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