Powell: “A December rate cut is not a foregone conclusion.”
Federal Reserve Issues FOMC Statement
Please consider the FOMC Statement, October 29, 2025.
Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.
In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Two Dissents
- Voting for the monetary policy action: Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller.
- Voting against this action: Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting
- Voting against this action: Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.
The lack of data from the shutdown will come into play, but September was mostly settled.
The BLS managed to get out the CPI data for September in time for this meeting (and the Social Security COLA) after Trump recalled BLS workers.
Flying Blind
Importantly, jobs data was not reported for September, but the data was at least collected.
I believe the shutdown will not last through November.
However, Data for October was not collected. That’s when the Fed will truly be flying blind.
So perhaps it’s just as well there is no November meeting this month.
The October Press Conference
Alternatively, you can watch the press conference here: FOMC Press Conference that link.
Key Powell Comments
- “Layoffs remain low.”
- “In the near term, inflation risks remain to the upside, labor to the downside.”
- “Policy is not on a preset course. A December rate cut is not a foregone conclusion.”
- “Goods prices increasing due to tariffs. Services other than housing moving sideways. Housing services inflation coming down. The base case is tariff inflation will be one time.”
- Powell brushed off a question about an AI bubble without really answering the question.
- “We don’t see layoffs in the initial claims data yet.”
- “There’s a growing consensus we should wait a cycle [before taking further action]”
- Powell discussed BLS “overcounting” of labor jobs.
- “Tariff inflation will continue into Spring, then they stop. Inflation is very much making people feel unhappy.”
- Powell brushed off a second question about stock market valuation. “We don’t set asset prices, the market does that. Interest rates are not part of the AI story.”
- Reporter Q: Are there any parallels to the 1990s? Powel responded “It’s really a different thing. Consumers are still spending.”
- “Job creation is very low, but unemployment is very low.”
Related Posts
October 10, 2025: Trump Recalls BLS Workers to Produce CPI Report Because SS Payments Need It
Oops, please come back.
October 24, 2025: Market Giddy Over Tame CPI for September, But Was It Really Tame?
Tame September CPI? How Tame?
I side with the dissent of Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.
My favorite set of comments was Powell brushing off three questions on stock market bubbles and AI, replying to one question “It’s really a different thing,” this time vs the 1990s.
For discussion, please see Circular Investment Deals in AI Look Similar to the Dot-Com Bubble
“The FED follows the market” No room for another cut. Only room for QE.
Powell didn’t learn the lessons of the 70s afterall even though he claimed he did. Now he’s gonna live the lessons of the 90s.
I hope everyone gets rich before the crash and knows when to head for the exits even though that isn’t possible. It won’t be orderly and the sellers will leave the late buyers in the dust.
And the 10 year US bond sold off after the announcement. Its 18 month cycle low looks to be running a little short. Maybe the low will arrive on the day of the next Fed meeting in December.
And once the shutdown ends & the jobs numbers weaken significantly in months ahead, the price will reverse course.
Powell sounds more and more like Bessent by the day. “This is fine! Everything is fine! Really! What? Me worry?”
Not for posting but FYI for Mish
https://taxfoundation.org/blog/illinois-harmful-tax-unrealized-gains/?utm_medium=email&_hsenc=p2ANqtz–WFY0ROYBSwLrOTt82gLZr9B_dLL614tFDxGiWYZYfmuenqqBRICdiB34kaikOA-UsBsuLyyNuLs62tbtjDPq3AKlhSQ&_hsmi=387510896&utm_content=387510896&utm_source=hs_email
WTF, rich people should not hold any public office. Of course there’s no inflation when you are a multimillionaire. There are no layoffs when you don’t have to work. Every thing is honky-dory when you are a multimillionaire. No health insurance who cares I’m a multimillionaire I’ll just pay out of pocket when I take a medical vacation in another country. Fuck these people I hope they all die this evening.
In the first few paragraphs of this Fed-speak nonsense, in no way, shape or form did they provide any justification for a rate cut.
I find this whole charade revolting actually. The Fed does whatever it wants to do to serve the big banks and makes up excuses afterwards.
We should file a complaint. Hmmm, who to though?
Absolutely amazing that we have a Republican president who deficit spends as much or more than Democrats, bullies a complicit Fed into lowering rates to screw everyone in cash while giving free money to banksters, and pretends that this betrayal of frugal Americans somehow mitigates the problem of interest payments on the deficit that he shamelessly exacerbates. It’s almost as if he’s in service to a foreign country.
Go ahead and say it – P U T I N.
What you describe is exactly what Republicans always do. Reagan started this with unprecedented deficits, and the others have followed suit. Only the Democrat, Clinton bucked the Republican trend.
I do not understand all that has happened today, bond rates up a little and equity market down makes sense, but gold tanking does not in my mind. Bottom line, I think the fed has lost control and the confidence of the financial system.
I do not understand why rates are fixed lower when employment is good historically and inflation is looking like it has bottomed. When the inflationary results of this round of cutting are fully felt, the inflation genie may be very hard if not impossible to put back in the tea pot.
Long term rates made a fairly large move.
The Fed’s premature ending of QT suggests a larger amount of anxiety (even a little SOFR-ing?) than the market was aware of?
Bond investors are always allergic to emerging inflation, even if the Fed doesn’t stand up to fight it. 2022 revisited?
CPI all items hasn’t bottomed. It’s on a six-month march higher.
Gold is dropping because it’s over bought. It’s time for a small blow off.
For the government, inflation is always transitory!
Eventually, Congress will started talking about a VAT.
A VAT dedicated to Fed debt reduction, over say 30 years, might actually work, if the Fed debt could be capped at the current level, which would mean the US would have to ‘live within its means.’ That is a truly balanced budget (of actual income and expenses–with NO off-budget items)
Without excess Fed Govt spending, you’d expect inflation to slow–bringing interest rates a notch lower. At the same time, the US Fed debt would be the only government debt with a path to repayment–increasing foreign demand for US bonds, and further lowering the interest rate. It would, however, make the dollar more valuable, so exports will drop, and imports will be cheaper.
How to get around that is the problem. Only two ways, if you exclude exchange rate games–increased innovation and increased productivity, Which means a change in social/cultural/economic priorities….
Reduced government spending would also lower GDP but only affect tax revenues by the taxes not paid as a result of government employees being laid off and whatever affects are imparted on government contractors.
Also, the federal debt by definition cannot go down if we run a deficit of any amount as a deficit means spending exceeds revenue.
To be dedicated to reducing the debt, it would first have to collect around 2 trillion a year to close the deficit. VAT revenue of $2,000,000,000,001.00 could be dedicate to reducing the debt by: one dollar. Might a well spend it.
Reduced government spending would mean a lot of Congresspeople don’t get reelected, so I wouldn’t be holding my breath on this.
“Dedicated to”
lol.
I’m waiting for Trump to propose a national lottery to help pay down the debt. Payable in BC, of course.
Mish and most everyone else here said the shutdown would end quickly and it would be another TACO.
The Dems’ constituents are the ones in the pincer: illegal aliens and SNAP recipients.
I think more MAGA in the southern states use welfare more than blue states. I see complaint after complaint from red state farmers and rural health care is in a shambles.
farmers and farm lobby the biggest government welfare queens in the country besides the MIC
In Mike Johnson’s home state of Louisiana 1 in 5 residents participate in SNAP. Oklahoma? 1 in 6. West Virginia? 1 in 6. Florida? 1 in 8. California? 1 in 7. New York? 1 in 7. Oregon? 1 in 6. Kentucky? 1 in 8. Nevada? 1 in 6.
Oregon has state government that prides itself in feeding the hungry.
The national average is 1 in 8.
If you look at the 100 counties with the highest SNAP participation rates, a significant minority of them host a large city. The highest participation rates are in rural America. Like in Texas, the counties with the highest participation rates are not the counties where Houston, Dallas, Fort Worth, San Antonio, El Paso, Austin, etc. are located. They’re rural counties. Rural Texas is Red.
Perhaps because they keep pushing out babies that they can’t afford to raise, feed or educate.
People who accept government welfare or food handouts should have to agree to be sterilized.
I always thought Norplant was a good idea. The Norplant can be removed if the welfare recipient becomes self-supporting. We are breeding an ideocracy.
And I said the Democrats are prepared to hold out for a long time.
A drop in the bucket.
Mish wont it be harder for the fed to hit 2 percent as the national debt gets bigger.
Absolutely. And Trump announced plans for more military spending, “golden ships” or whatever in addition to the “golden dome”
We have to counter the “threat from China”. lol. More like, we have to be able to threaten China. The golden ships will have hypersonic missiles – if we can ever make them.
Ginormous railguns.
We are in the process of losing everything to China. The American Century ended in 2000 this will be China’s century.
Ill worry about a threat from china when they start making boats to float over here. Big threat from china is economic and maybe threat to smaller local nations.
Navy ships are for dealing with 3rd world countries.
No, because interest rates can be made infinitely high. There is no “pushing on a string” when it comes to bring pushing inflation down.
hitting the zero cursor on the NYFED computer cursor currency, to conjure up some free currency for the boys at the discount window.
This will help the companies deploy more AI to cut more jobs!
What’s really motivating the cuts is they want to extend the credit/debt cycle and thus delay the inevitable contraction of credit which will trigger a recession.
The federal government has been doing its part by running $2 trillion yearly deficits. Middle and lower income people have been buying food and other necessities on credit cards. With lower rates, people can ‘afford” to buy even more food with their cards.
Lower mortgage rates will help fuel a bunch more debt, as there is lots of pent up demand that’s been waiting for lower rates.
Ironically, as long as the debt keeps piling up, everything will be ‘fine’ (except for inflation of course).
You actually think credit card interest rates will drop below 24% for the average person, what planet do you live on?
I don’t understand usury rates. That’s cruel and unusual punishment. In 3 years, return’s double, 72/24
There’s one thing all members of the House (and 1/3 of the Senate) will always agree upon: they all want to get re-elected next year.
Always a bipartisan consensus for credit splurging, to stave off the recession for “one more election cycle”.
Yield on the 10 year is up .03%. About as expected.
Usual temporary bounce after they make a cut. As recently as July, the 10 yr rate was 4.5%. After the September rate cut, it declined from 4.14% to 3.95%. It will fall again after this cut.
This is a live post. I am monitoring the press conference and adding comments from Powell.
Monitoring the bond market, the 10 year moved up at the moment. Currently 4.058.
Good point
The market always does a fake-out at first, it seems.