Fed Cuts Rates Again and Will End Balance-Sheet Runoff in December
The move reflects mounting concern about employment under a partial government shutdown that has obscured official data.
Overview
- The FOMC lowered the target range by 0.25 percentage point to 3.75–4.00%, the lowest level since 2022.
- Policymakers cited increased downside risks to jobs in recent months and leaned on private indicators and district Fed intelligence as official reports were delayed.
- Quantitative tightening will halt on December 1, pausing a balance-sheet decline from roughly $9 trillion to about $6.6 trillion since 2022.
- Chair Jerome Powell said an additional cut in December is not a foregone conclusion and indicated the pace could slow if the shutdown persists.
- The decision featured two dissents, with Governor Milan seeking a 0.5-point cut and Kansas City Fed President Schmid advocating a hold.