The U.S. Federal Reserve has cut its benchmark interest rate by a quarter of a percentage point, lowering the policy range to 3.75%\u20134.00%, in a closely watched and divided decision. The move reflects the Fed\u2019s efforts to support economic growth while navigating limited data availability during the ongoing federal government shutdown.<\/p>\n
The 10\u20132 decision came as policymakers cited signs of tightening liquidity in money markets. Alongside the rate cut, the Fed announced plans to restart limited purchases of Treasury securities, a step aimed at preventing further liquidity shortages.<\/p>\n
The central bank stated that it will maintain the overall size of its balance sheet steady on a month-to-month basis\u00a0from December 1, while reinvesting proceeds from maturing mortgage-backed securities into Treasury bills to rebalance its portfolio.<\/p>\n
Also Read<\/strong>: Can Studds Accessories IPO Ride High? GMP Holds Steady at \u20b953\u2013\u20b955<\/a><\/em><\/p>\n Two key policymakers dissented from the decision:<\/p>\n Governor Stephen Miran pushed for a deeper reduction in borrowing costs.<\/p>\n<\/li>\n Kansas City Fed President Jeffrey Schmid opposed any rate cut, citing persistent inflation pressures.<\/p>\n<\/li>\n<\/ul>\n This rare split marked only the third time since 1990 that members of the Fed have dissented both in favor of tighter and looser policy at the same meeting.<\/p>\n The decision to ease policy slightly was expected by investors, who viewed it as a measure to stabilize a cooling job market. U.S. stock indexes posted modest gains, while Treasury yields rose following the announcement.<\/p>\n Market participants continued to price in expectations of another 25-basis-point cut at the Fed\u2019s final policy meeting in December, followed by a possible further easing in March 2026.<\/p>\n Alexandra Wilson-Elizondo, Global Co-CIO of Multi-Asset Solutions at Goldman Sachs Asset Management, said that \u201canchored expectations, a soft inflation release, and signs of labor market cooling support a cautious easing bias.\u201d<\/p>\n Fed officials acknowledged that the government shutdown has hindered access to recent economic data, particularly on employment. The central bank relied on August\u2019s unemployment figures, the last available official release, while noting that \u201cavailable indicators suggest\u201d the economy continues to grow at a moderate pace.<\/p>\n Inflation has been rising gradually, from 2.3% in April to 2.7% in August, as per the last available Personal Consumption Expenditures (PCE) Price Index data \u2014 the Fed\u2019s preferred inflation gauge. Policymakers expect the rate to reach 3% by year-end, before easing gradually.<\/p>\n Meanwhile, the Fed expressed growing concern over the job market, stating that \u201cdownside risks to employment rose in recent months.\u201d<\/p>\n With economic data limited by the shutdown and inflation still above target, the Fed faces a complex policy landscape. Markets expect continued cautious easing, with investors closely watching signals from the December policy meeting.<\/p>\n Click here to explore:<\/strong><\/em> The U.S. Federal Reserve has cut its benchmark interest rate by a quarter of a percentage point, lowering the policy range to 3.75%\u20134.00%, in a closely watched and divided decision. The move reflects the Fed\u2019s efforts to support economic growth while navigating limited data availability during the ongoing federal government shutdown. Rate Cut and Liquidity […]<\/p>\n","protected":false},"author":6,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1366],"tags":[],"ppma_author":[1383],"class_list":{"0":"post-16357","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world-news"}," _eael_post_view_count":0,"authors":[{"term_id":1383,"user_id":6,"is_guest":0,"slug":"pradeep","display_name":"Pradeep Sangatramani","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/09\/Pradeep-Sangatramni.jpeg","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/09\/Pradeep-Sangatramni.jpeg"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/16357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=16357"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/16357\/revisions"}],"predecessor-version":[{"id":16359,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/16357\/revisions\/16359"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/16358"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=16357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=16357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=16357"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=16357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Policy Division at the Fed<\/h2>\n
\n
Economic Context and Market Reaction<\/h2>\n
Shutdown Limits Data Visibility<\/h2>\n
Inflation and Employment Outlook<\/h2>\n
Outlook Ahead<\/h3>\n
\nFII DII Data<\/a>
\nIPO<\/a>
\nBSE Sensex<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"