U.S. Banks Lower Prime Rate to 7.25% Amid Fed’s Response to Labor Market Weakness

Major U.S. banks, including JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America, swiftly reduced their prime lending rate to 7.25% following the Federal Reserve's latest policy adjustment. This MOVE directly influences borrowing costs for consumers and businesses, affecting mortgages, credit cards, and small business loans.

The Fed's decision reflects growing concerns over rising unemployment claims, now at a four-year high, despite earlier expectations of maintaining steady rates through summer. Richard Flynn of Charles Schwab UK noted, 'The labor market has shown more fragility than anticipated,' attributing the slowdown to trade policy uncertainties under the TRUMP administration.

While the rate cut aims to stimulate borrowing and preempt economic contraction, inflationary pressures persist above the 2% target. The interplay between monetary policy and trade tensions continues to cloud the outlook for both traditional finance and digital asset markets.