In last month’s meeting, the Federal Open Market Committee (FOMC) voted 11-1 in favor of lowering interest rates by a quarter-point from the 4.25% to 4.5% range to between 4% and 4.25%.
Inflation rose slightly to 3% in the 12-month period ending in September 2025, up 0.1% compared the same period 12 months previously. The rise was less than the markets had anticipated but inflation remains way above the Fed’s goal of a 2% annual rate.
Meanwhile the US Bureau of Labor Statistics reported that, “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% on a seasonally adjusted basis in September, after rising 0.4% in August”.
CPI-U goods and services increase
The index for gasoline rose 4.1 percent in September – the largest factor in the all items monthly increase, while the food index increased 0.2 percent over the month as the food at home index rose 0.3 percent and the food away from home index increased 0.1 percent.
What could it mean for interest rates? Several market sources expect the FOMC to slice another quarter point off the current rate to 3.75%-4%. If it happens, it would be the second interest cut this year.
The FOMC are due to meet on October 28-29 – the penultimate meeting of 2025, with the final meeting of the year scheduled for December 9-10.
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