US Federal Reserve Cuts Interest Rates by 0.25% in October
US Federal Reserve Decides to Further Lower Benchmark Interest Rate by 0.25%
The U.S. Federal Reserve (Fed) lowered its benchmark interest rate by 0.25 percentage points on October 29, 2025 (local time). This follows a rate cut in September and is interpreted as a measure to address concerns about a slowdown in the U.S. economy. With this rate cut, the U.S. benchmark interest rate has been adjusted from 4.00-4.25% to 3.75-4.00%. Along with the rate cut, the Fed announced that it would end its quantitative tightening policy on December 1, 2025, indicating plans to supply additional liquidity to the market.
The rate cut decision was made through a meeting of the Federal Open Market Committee (FOMC), with 10 out of the 12 participating members voting in favor of a 0.25 percentage point reduction. Jeffrey Schmidt, President of the Federal Reserve Bank of Kansas City, opposed the rate cut, suggesting that holding rates steady would be more appropriate given the current economic situation. Conversely, Fed Governor Steven Myron advocated for a more aggressive stimulus by lowering the rate by 0.5 percentage points, indicating differing opinions among committee members regarding the direction of interest rate policy.
South Korean President Lee Jae-myung instructed relevant ministries to closely examine the impact of the U.S. rate cut on the domestic economy. He emphasized the need to prepare for the impact of the U.S. rate cut on the won/dollar exchange rate and the potential for increased volatility in the domestic capital market. Following the U.S. Federal Reserve's rate cut decision, the government held an emergency macroeconomic and financial meeting to assess the impact on the domestic financial market and is preparing to implement market stabilization measures immediately if necessary. Furthermore, analysis is underway on various scenarios, including the impact of the U.S. rate cut on the competitiveness of domestic export companies and the potential for rising import prices.
U.S. President Donald Trump welcomed the Fed's decision to cut interest rates. President Trump has criticized the Fed's interest rate hike policy as an obstacle to U.S. economic growth and has been calling for continuous rate cuts. President Trump predicted that the rate cut would further accelerate the growth of the U.S. economy and have a positive impact on job creation. President Trump also stated that he expects the Fed to implement a more proactive monetary policy in the future to promote U.S. economic growth and price stability.
The U.S. rate cut is expected to have a significant impact on global financial markets. In particular, there are concerns about increased volatility in capital inflows and outflows in emerging markets, and central banks in various countries are expected to re-examine their monetary policy directions in response to changes in U.S. interest rate policy. Experts warn that if the U.S. rate cuts continue for an extended period, the global low-interest-rate phenomenon could intensify, and there is a risk of asset price bubbles. Therefore, governments around the world should conduct a thorough analysis of changes in U.S. monetary policy and make policy efforts to minimize the impact on their own economies.
