Why did the US Federal Reserve cut interest rates in December 2025?

The Fed cut rates to support the labor market, which has seen slowing job gains and a rising unemployment rate.

What is the new interest rate range set by the FOMC?

The FOMC set the new target range for the federal funds rate at 3.50% to 3.75%.

What are the Federal Reserve's main economic goals?

The Federal Reserve's dual mandate is to achieve maximum employment and maintain inflation at a 2% goal.

Home / Business and Economy / Fed Cuts Rates Again: Easing Continues Amidst Economic Concerns

Fed Cuts Rates Again: Easing Continues Amidst Economic Concerns

11 Dec

•

Summary

Federal Reserve lowered interest rates by 25 basis points.
This marks the third consecutive rate cut this year.
Fed aims to support labor market and manage inflation.

Fed Cuts Rates Again: Easing Continues Amidst Economic Concerns

The Federal Open Market Committee (FOMC) of the United States Federal Reserve has decided to reduce its key interest rate by 25 basis points, establishing a new target range of 3.50% to 3.75%. This marks the third consecutive rate cut implemented by the central bank, underscoring a consistent monetary easing policy throughout the year.

The decision, made after a two-day policy meeting and announced on Wednesday, December 10, 2025, reflects the committee's response to recent economic indicators. Job gains have shown a slowdown, and the unemployment rate has edged upward, prompting the Fed to act to support the labor market. Inflation, however, has also seen an increase and remains somewhat elevated.

With a stated goal of maximizing employment and achieving 2% inflation, the Fed emphasized its attentiveness to risks on both sides of its dual mandate. This rate adjustment is intended to provide economic stability and allow inflation to return to its target trend, even as uncertainty about the economic outlook persists.