U.S. Fed Cuts Rate Again as Government Shutdown Clouds Economic Outlook

October 29, 2025 - The U.S. Federal Reserve lowered the federal funds rate by 25 basis points to a range of 3.75% to 4.00%. This marks its second consecutive cut this year after September and its fifth since September 2024. The Federal Open Market Committee (FOMC) noted that while economic activity is expanding moderately, job gains have slowed, unemployment has edged up, inflation remains elevated, and downside risks have recently increased.

This decision occurred against the backdrop of a nearly month-long government shutdown, which has delayed key economic data, complicating the policy environment. Fed Chair Jerome Powell stated that a further rate cut in December is "not a foregone conclusion. Far from it," emphasizing that the lack of official data due to the shutdown necessitates caution and could justify a pause. His remarks triggered a significant sell-off, pushing the 10-year Treasury yield up by over 10 basis points.