An analysis of pre-meeting indicators showed a moderate increase in economic activity, a slowdown in the pace of job gains and a slight increase in unemployment in September, noted in the regulator’s press release. In addition, inflation rose compared to the beginning of the year and remains at a slightly elevated level.
Economists in the U.S. and around the world expected just such a reaction of the U.S. Federal Reserve to the prevailing economic realities. The prime rate was cut for the third time since the beginning of 2025 and fell to its lowest since November 2022. However, the decision was not unanimous – 9 Fed members voted in favor, two were against it, and one proposed a more radical reduction and did not support the adopted version either.
This was also reflected in the Fed’s release, which noted that uncertainty about the country’s economic outlook remains high. Therefore, the Fed emphasized that it is closely monitoring the risks on both sides of the mandate (price stability and maximum employment) and believes that the risks to employment have increased in recent months.
The US regulator in its decision also provided new forecasts for economic growth in the coming years. GDP growth in 2025 is expected at 1.7% (0.1 p.p. more than the previous forecast), for 2026 the estimate has improved from 1.8% immediately to 2.3%, and for 2027 from 1.9 to 2%. Inflation expectations have also improved: by the end of 2025 inflation will be 2.9% instead of 3%, and in 2026 it will be at 2.4% instead of 2.6% previously. For 2027, the forecast of 2.1% remained unchanged.
The next Fed meeting is scheduled for January 27-28, 2026.
