Fed Cuts Rates Amid Labor Market Concerns, Ends Quantitative Tightening
The Federal Reserve delivered a widely anticipated 25-basis-point rate cut, lowering the federal funds target range to 3.75%-4.00%. Chair Jerome Powell highlighted rising downside risks to employment in a softening labor market, though inflation remains somewhat elevated despite significant easing.
In a 10-2 vote, the FOMC's decision saw dissent from both hawks and doves. Newly appointed Governor Stephen I. Miran pushed for deeper cuts, while Kansas City Fed President Jeffrey R. Schmid advocated for maintaining rates.
Simultaneously, the central bank announced the end of quantitative tightening, with balance sheet runoff concluding by December 1. This policy pivot comes as the Fed navigates economic crosscurrents exacerbated by a government shutdown-induced data vacuum.
