Fed Cuts Rates to 3.75%–4.00%

The Federal Reserve this week cut its policy rate by 25 basis points to a 3.75%–4.00% target range, while Chair Jerome Powell warned a further December cut is "far from" certain amid deep divisions and a government shutdown that has suspended key economic reports. Several officials publicly voiced opposition or dissent — Kansas City Fed President Jeffrey Schmid formally dissented and non‑voting participants Beth Hammack and Lorie Logan said they would have opposed the move, while Atlanta President Raphael Bostic said he eventually supported it but called inflation a "significant problem." The Fed signaled it will halt balance-sheet runoff in December and likely resume net Treasury purchases early next year to expand reserves and ease investor concerns about debt financing. Markets and many brokerages still price a strong probability of another 25bp cut in December, though some firms (for example, Nomura) expect a pause, leaving uncertainty elevated. Missing government data from the shutdown is amplifying policy uncertainty. Abroad, the Bank of Mexico is widely expected to cut its key rate to about 7.25% next week (and possibly again in December), while the Bank of England faces a knife-edge decision on a potential quarter-point cut as UK inflation and growth indicators soften.