FOMC Meeting: Key Takeaways

October FOMC meeting | October 29, 2025

The Federal Open Market Committee (FOMC or the Committee) reduced the federal funds rate by 25 basis points (100 basis points equal 1%) to 3.75% – 4.00%, the second 25 basis point cut this year. The FOMC stated that available indicators suggest economic activity has been expanding at a moderate pace while job gains have slowed this year. The Federal Reserve (Fed) will end the runoff of its balance sheet beginning on December 1st.

• Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August. Inflation has moved up since earlier this year and remains somewhat elevated.
• In support of its goals, the Committee lowered the target range for the federal funds rate by 25 basis points to 3.75%-4.00%. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate (price stability and full employment) but downside risks to employment have increased in recent months.

• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook.
• The Committee will continue to take into account a wide range of information including readings on labor market conditions, inflation pressures, inflation expectations, and financial and international developments.

• A cut to the federal funds rate at today’s meeting was expected by markets. There was one Fed governor that dissented: Stephen Miran, who would have preferred to lower the rate by 0.50%. There was also one Fed President who dissented: Jeffery Schmid, who would have preferred to keep rates unchanged.
• The Fed is data driven and given the lack of official data available due to the ongoing government shutdown ,the potential for additional cuts this year is uncertain. The Fed risks making a policy mistake if it does not have a full picture of the economy. Although, we believe additional Fed rate cuts will be forthcoming if inflation allows. Our current expectation is for three more rate cuts before the end of 2026. There continues to be considerable disagreement from individual members on the appropriate target range for rates.
• The Fed will end its balance sheet runoff beginning on December 1, 2025, after slowing the pace of runoff earlier this year. The Fed stated that it will roll over maturing agency debt into Treasury bills.

• December 10* | January 28 | March 18* | April 29
  

  *Indicates the meeting is associated with a summary of economic projections. In addition, every meeting will be accompanied by a press conference.

Forecasts and targets are based on certain assumptions and on views of market and economic conditions which are subject to change.

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