Fed continues to lower interest rates for the second time in 2025

DNVN - The US Federal Reserve (Fed) on October 29 announced its decision to cut interest rates by another 0.25 percentage points - the second consecutive cut in 2025 - to deal with increasing risks in the labor market, while there are increasingly disagreements within the Fed about the policy direction.

According to the official announcement, the Fed's policy-making committee voted 10 votes in favor and 2 votes against, thereby adjusting the key lending rate range down to 3.75% - 4.00%.

Headquarters of the Federal Reserve (Fed) in Washington, DC, USA. Photo: THX/TTXVN

The two dissenting votes came from Governor Stephen Miran — who proposed a more drastic cut of 0.5 percentage points — and Kansas City Fed President Jeff Schmid, who “wants to keep rates where they are.”

This move to lower interest rates is considered to stimulate US economic growth in the context of businesses being affected by reciprocal tariffs applied by President Donald Trump on a wide scale, while also creating more time for policymakers when the federal government is still in a state of temporary shutdown.

The stalemate between Republicans and Democrats has lasted nearly a month since the government shutdown, resulting in the release of most official economic data.

Along with the rate cut, the Fed also announced that it would end its balance sheet reduction policy starting December 1. The balance sheet expanded sharply during the early stages of the COVID-19 pandemic and has been gradually shrinking in recent years.

Viet Anh

Source: https://doanhnghiepvn.vn/quoc-te/fed-tiep-tuc-ha-lai-suat-lan-thu-hai-trong-nam-2025/20251030084501093