October 29, 2025
September 17, 2025
Jerome H. Powell
October 29, 2025 FOMC Statement
FOMC statement
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EDT
Recent Available indicators suggest that growth of economic activity moderated in the first half of the year. has been expanding at a moderate pace. Job gains have slowed, slowed this year, and the unemployment rate has edged up but remains low. remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen. rose in recent months.
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 4 3-3/4 to 4‑1/4 4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings decided to conclude the reduction of Treasury its aggregate securities and agency debt and agency mortgage‑backed securities. holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; Jeffrey R. Schmid; and Christopher J. Waller. Voting against this action was were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting, and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.
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Implementation Note issued September 17, October 29, 2025
Our summary
What changed
- The FOMC lowered the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, a further cut from the previous range.
- The FOMC announced it will conclude the reduction of its aggregate securities holdings on December 1, a new balance sheet policy decision.
- The economic description was updated: activity is now expanding at a moderate pace, and inflation has moved up since earlier in the year.
- The FOMC now judges that downside risks to employment rose in recent months, a slight shift from the prior assessment.
- The vote was not unanimous: Stephen I. Miran dissented (preferring a 1/2 point cut) and Jeffrey R. Schmid dissented (preferring no change).
Implications
The decision to end balance sheet reduction in December signals a shift toward a less restrictive policy stance, potentially supporting market liquidity.
The updated language on employment risks and inflation suggests the FOMC remains focused on both mandates, with a slight emphasis on downside employment risks.
The dissents indicate internal disagreement about the pace of easing, with some members favoring more aggressive cuts and others preferring to hold rates steady.
Summary generated automatically from the statements. Not investment advice.
Implementation Note
The settings that put the decision into effect: the interest rate paid on reserves, the FOMC's instructions to the New York Fed's trading desk, and the discount rate. Changes are marked the same way as in the statement.
- The Board of Governors of the Federal Reserve System voted unanimously to lower the interest rate paid on reserve balances to
4.153.90 percent, effectiveSeptember 18,October 30, 2025. - As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive: "Effective
September 18,October 30, 2025, the Federal Open Market Committee directs the Desk to: - Undertake open market operations as necessary to maintain the federal funds rate in a target range of
43-3/4 to4-1/44 percent. - Conduct standing overnight repurchase agreement operations with a minimum bid rate of
4.254.0 percent and with an aggregate operation limit of $500 billion. - Conduct standing overnight reverse repurchase agreement operations at an offering rate of
43.75 percent and with aper‑counterpartyper-counterparty limit of $160 billion per day. - Roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing in
each calendar monthOctober and November that exceeds a cap of $5 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap. Beginning on December 1, roll over at auction all principal payments from the Federal Reserve's holdings of Treasury securities. - Reinvest the amount of principal payments from the Federal Reserve's holdings of agency debt and agency
mortgage‑backedmortgage-backed securities (MBS) received ineach calendar monthOctober and November that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding. Beginning on December 1, reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasury bills. - Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons."
- In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve a 1/4 percentage point decrease in the primary credit rate to
4.254.0 percent, effectiveSeptember 18,October 30, 2025. In taking this action, the Board approved requests to establish that rate submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Richmond, Atlanta, Chicago,Minneapolis, Kansas City,Dallas, and San Francisco.
Press conference
October 29, 2025, 2:30 p.m. ET · Read the transcript
What Powell said that the statement didn't
- The chair said GDP rose at a 1.6 percent pace in the first half of the year, down from 2.4 percent last year, with data prior to the shutdown suggesting a firmer growth trajectory than expected, mainly due to stronger consumer spending.
- The chair said a good part of the slowdown in job gains likely reflects a decline in labor force growth from lower immigration and participation, though labor demand has clearly softened.
- The chair said estimates based on the CPI suggest total and core PCE prices both rose 2.8 percent over the 12 months ending in September, with goods inflation picking up while services disinflation continues.
- The chair said higher tariffs are pushing up prices in some goods categories, with a reasonable base case that effects will be a one-time shift in the price level, but persistent effects are a risk to be managed.
- The chair said the FOMC’s balance sheet runoff has reduced securities holdings by $2.2 trillion over three and a half years, with the balance sheet falling from 35 percent to about 21 percent of nominal GDP.
Summary generated automatically from the transcript and the statement.