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Fed Cuts Key Rate 25 Basis Points to 3.75%–4.00% as Risks to Jobs Grow

Inflation stands at 3%, above the Fed’s 2% goal.

Overview

  • The central bank said available indicators point to moderate economic expansion.
  • Officials reported slower job gains this year and a slight uptick in unemployment that remains low as of August.
  • Policymakers flagged elevated uncertainty and said inflation remains somewhat high even after a recent cooling.
  • The federal government shutdown created an “interruption in the data,” limiting key statistics and forcing reliance on alternative indicators.
  • Chair Jerome Powell in September highlighted rising downside risks to employment that factored into the decision.