On October 29, local time, the Federal Reserve announced that it would lower the target range of the federal funds rate by 25 basis points to a range of 3.75% to 4.00%. This is the second interest rate cut by the Federal Reserve after it cut interest rates by 25 basis points on September 17. It is also the fifth interest rate cut since September 2024.

Market observers believe that the Fed’s decision to cut interest rates is mainly based on preventing labor market risks. Data released before the U.S. government’s “shutdown” already showed a weakening labor market. Federal Reserve Chairman Jerome Powell said earlier this month that he would remain focused on risks to the labor market. However, as key economic data are still missing and inflationary pressures still exist, there are still differences within the Fed on the path of future interest rate cuts.