The Federal Reserve (Fed) cut its benchmark interest rate by 25 basis points, bringing the target range down to 3.5%–3.75%.

Powell said this marks the third consecutive rate cut since September — part of a “normalisation” of policy to support a cooling labour market while still managing inflation risks.

On inflation: some of the recent price pressures were driven by past import tariffs (from earlier tariff policy) — and those effects may fade over time.

On employment and economic outlook: the labour market has shown signs of softening, with unemployment projected to inch up toward ~4.5% by end-2025. The Fed wants to ensure rate cuts support jobs without reigniting inflation.

On future policy stance: Powell indicated that a rate hike is not the “base case” — but the Fed is also not committing to more cuts. The next move will depend entirely on how economic data (inflation, jobs) evolves.

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