Fed Cuts Rates by 25 Bps Amid Sticky Inflation, Ends Quantitative Tightening
The Federal Reserve lowered interest rates by 25 basis points to a target range of 3.75%-4.00%, marking its second cut this year. The decision saw broad consensus, with 10 of 12 voting members supporting the move—though dissent emerged from Governor Stephen Miran (favored 50 bps) and Kansas City Fed President Jeff Schmid (preferred no change). Markets had largely priced in the outcome, with CME's FedWatch tool assigning 97.8% odds to a quarter-point reduction.
Officials signaled persistent inflation risks, noting price pressures remain "somewhat elevated" despite moderating economic growth and a cooling labor market. Separately, the Fed announced it will halt quantitative tightening on December 1, ending its balance sheet runoff campaign aimed at curbing money supply growth.
