FOMC Update - Oct 2025
October 29, 2025
As expected, the FOMC lowered the federal funds rate target range by 25bp to 3.75%-4.00%. The Fed will end the reduction of its securities holdings beginning on December 1st. The Fed reiterated its labor market concerns with “job gains have slowed, and the unemployment rate has edged up but remained low through August,” and “downside risks to employment rose in recent months.” Rates and Market:
- Fed Funds Target: 3.75%-4.00%
- Market Reaction: The S&P 500, UST 2s, and UST 10s were mostly unchanged. The market is pricing an 84% chance of a 25bp rate cut at the December 2025 FOMC meeting.
The FOMC announced the following actions and analysis:
- 10-2 policy vote with two dissents.
- Fed Governor Stephen Miran dissented in favor of a 50bp cut, and Kansas City Fed President Jeff Schmid dissented in favor of no rate change.
- The Fed says “available indicators” suggest economic activity has been expanding at a moderate pace.
- The Fed reiterates that inflation “has moved up since earlier in the year and remains somewhat elevated.”
Previous Report
FOMC Update - Sep 2025 (09/17/25)
As expected, the FOMC changed its benchmark rate range from 4.25%-4.50% to 4.00%-4.25% for the first time this year. The Fed projects an additional...