US Fed Decision- October 2025

The US Fed addressed inflation concerns heightened by recent tariffs, which have driven up prices for certain goods. At the October 28-29, 2025, meeting, the Fed voted 10-2 to set the policy rate at 3.75-4.00%. One member, Jeffery Schmidt, supported no change, while Stephan Miran backed a 50 bps cut.

US Federal Decision October 2025

Fed Chief Jerome Powell emphasized the need to balance economic risks. He stated that upcoming economic data will guide future policy, especially since October's 3% inflation outpaced September's 2.9%.

The two rate cuts of 25 bps have come in consecutively (September and October), owing to the conditions of growing concerns of inflation, growth, and US Tariffs.

Numbers speak louder

As per Powell, the changes to the economy have barely seen any significant change with respect to the employment numbers. Though the unemployment rate has seen a slight increase, there is slow progress in terms of job gains in the US economy.

Assessing the risks is the stand the members of the US Fed have taken to make any significant change in the policy. In the current meeting, the key point of interest is the spike in inflation.

Labor market trends

The job growth has seen a sharp decline in the growth trend before the announcement of the shutdown. Many of the big corporate giants have also announced major job cuts, which implies that companies are trying to bring down costs. With the new immigration policies, there is also a significant risk to the supply of labor in the US economy. The situation in the US economy is not looking good at the moment. Unless the lawmakers reach a deal, the Bureau of Labor Statistics and other agencies will stop collecting and publishing official statistics tracking the jobs market, consumer prices, spending, and a range of other metrics.

The US Federal Reserve is in a very vulnerable situation to keep its inflation and employment numbers in check. It would be no easy task to keep them on a risk-free path, as there are chances of inflation spiking up and the labor market showing signs of weakening trends if policies are not handled with due diligence.