Overview
- The federal funds target now stands at 3.50%–3.75%, marking the third reduction of 2025 and prioritizing employment risks despite inflation near 3%.
- The decision exposed a split vote: nine supported a 25 bp cut, two opposed any cut, and Governor Stephen Miran favored a larger 50 bp move.
- The Fed will conduct reserve management purchases of short‑dated Treasuries at roughly $40–45 billion per month to support market liquidity.
- Powell signaled a cautious near‑term path often described as a hawkish cut, and markets saw modest equity gains with a weaker dollar and a stronger euro.
- Persistent pressure from President Trump and the May 2026 chair transition add uncertainty to the policy path, with Kevin Hassett widely discussed in reports as a potential successor.