Fed cuts rates by 0.25% as labour market softens, but signals further cuts are not certain

The Federal Reserve announced a 25-basis-point interest rate cut, lowering the federal funds target range to 3.75-4.00 %. The decision reflects concerns over a weakening labour market and easing inflation pressures. Fed Chair Jerome Powell emphasised that further rate reductions are not guaranteed, citing data gaps and persistent uncertainty tied to the government shutdown. While the move eases borrowing costs for households and businesses, markets reacted cautiously as the central bank did not commit to a December cut and highlighted upcoming economic data gaps.