Guess what? The US Fed just cut its benchmark interest rate by 25 basis points, bringing it down to 3.5–3.75%! 🎉 This marks the third cut in 2025 as policymakers aim to keep the economy humming.
At a recent press conference, Fed Chair Jerome Powell explained that after slashing rates by 75 bps since September and 175 bps since last September, the fed funds rate now sits near its neutral level. Powell says they are well positioned to wait and see how the economy evolves.
Why the cuts? Powell pointed to the impact of US tariff policies on inflation. With price pressures expected to ease once those tariffs fade, these rate cuts are designed to stabilize the job market and nudge inflation back toward the Fed’s 2% goal.
Meanwhile, US President Donald Trump chimed in, saying the cut could have been at least doubled. He's been pushing the Fed for bigger rate moves to turbocharge growth, calling Chair Powell a 'stiff' and this cut 'rather small'.
Whether you’re tracking global markets, startup funding, or planning that next big purchase, these rate decisions can ripple across the world 🌏. Stay tuned as we watch how this unfolds!
Reference(s):
cgtn.com
