US cuts interest rates to lowest bank rate in three years - Chris Harmse

The US Federal Reserve's Federal Open Market Committee (FOMC) has cut interest rates for the second time this year.

- CHRIS HARMSE

FEDERAL Reserve Chairman Jerome Powell.

(AMBER BAESLER, AP Photo)

The FOMC officials agreed to another 25 basis points (0.25%) cut, that lowers its benchmark lending rate to a range between 3.75% and 4%.

This is the lowest Bank rate in three years. This cut brings more uncertainty to markets as was expected with the US dollar appreciation against most other currencies and precious metals like gold and platinum lost steam.

Adding to the rate move, the FOMC announced that it would be ending the reduction of its asset purchases - a process known as quantitative tightening on December 1, 2025.

The statement revealed some serious concerns about the US economy over the short run.

The first one is the worries over the job market. The FOMC expressed its fear that the “downside risks to employment rose in recent months”. Given the US government shut down that continues, the lack of official non-farm payrolls data also seems not to be released this coming Friday. This will be the second consecutive month of uncertainty on the employment data and will increase tensions on the state of the US economy.