US Fed cuts interest rates; global markets brace for ripple effects

Washington (The Uttam Hindu): Important economic news has emerged from the United States. The Federal Reserve, as anticipated, has decided to cut policy rates. The US Fed has announced a 25 basis point, or 0.25%, reduction in interest rates. Following this reduction, interest rates in the US are now in the range of 3.75% to 4%. Previously, the Fed had cut rates by the same amount in September. According to the Federal Reserve, this step was taken to stabilize the US economy.

US Fed cuts interest rates in America, may have an impact on markets around the world : This is the second consecutive time in this year 2025 that the Federal Reserve has reduced the policy rate. The Fed has reduced the overnight benchmark rate to a range of 3.75%-4.00%. In September, this rate was 4-4.25%. This decision was voted on by a 10-2 ratio in the Fed meeting. One member opposed the rate cut, while one suggested a 50 basis point cut.

Fed Chairman Jerome Powell hinted in September that further rate cuts were possible, but after this meeting, he did not indicate any new rate cuts in December. He stated that there were differences within the committee regarding the December meeting. The next Fed meeting is scheduled for December.

A statement issued by the Fed said that recent data shows that US economic activity is progressing at a slow pace. So far in 2025, job growth has been low and unemployment has increased slightly, although this situation is better than in August. Inflation remains high. Therefore, the decision to cut interest rates was taken to stabilize the economy and balance potential risks.

Monetary changes in the US have an impact on other countries, including India. The Indian stock market often fluctuates following Fed decisions. Asian markets were mixed following Wednesday's rate cut announcement.