US Federal Reserve Meeting 2025: Key interest rate cut to 3.50%-3.75% amid high inflation

US Federal Reserve Meeting 2025: The US Federal Reserve's Federal Open Market Committee (FOMC), led by Jerome Powell, on Wednesday lowered its key benchmark interest rate by 25 basis points to the range of 3.50% to 3.75%. The decision comes at a time when inflation in the US remains high and the job market continues to weaken.

“In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3‑3/4 per cent,” said the FOMC in its official statement on Wednesday.

This rate cut is the third consecutive drop since September 2025. Since December 2024, the central bank had kept its key interest rates unchanged, before cutting them for the first time in September this year.

The US Fed’s December policy decision comes at a time when the US economy is showing mixed signals. The central bank is trying to strike a balance between keeping prices under control and supporting the country’s job market.