The Federal Reserve on Wednesday reduced its benchmark interest rate by a quarter point to a range of 4–4.25%, responding to slowing economic growth and persistently high inflation.
This marks the first rate cut by the central bank in 2025.
Chair Jerome H. Powell said the central bank remains focused on supporting maximum employment while bringing inflation back to its 2% target. He noted that economic conditions remain challenging, with inflationary pressures high and risks to employment rising.
Speaking at a press conference, Powell also revealed that the Fed is reducing its workforce by around 10%. He said that once the cuts are complete, staffing levels will return to roughly what they were a decade ago. While the central bank is open to constructive feedback on improving operations, Powell indicated there is no need for a formal review.
A majority of Fed officials now anticipate at least two further rate cuts this year, though some expressed caution over the timing and scale of additional reductions. Stephen Miran, the newest Fed governor and former economic adviser to President Donald Trump, dissented in the vote, advocating a larger cut.
The decision comes amid ongoing trade and tariff uncertainties, which continue to affect growth and consumer prices. Borrowers are unlikely to see immediate relief, but markets are closely watching for guidance on future monetary policy.
The meeting was marked by unusual circumstances, including legal disputes over Fed appointments and Miran’s Senate confirmation while on leave from The White House. Powell’s post-meeting remarks are expected to clarify the Fed’s outlook for the remainder of 2025.
The move reflects the Fed’s effort to balance economic growth with maintaining price stability in a complex financial environment.
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Russia launched an overnight drone attack on Ukraine’s Odesa region, damaging residential buildings and infrastructure, and injuring four people, including three children, according to regional authorities on Wednesday.
Thailand released 18 Cambodian soldiers on Wednesday, ending their 155-day detention. This comes after a ceasefire agreement between the two countries halted 20 days of fighting that killed over 100 people and displaced more than half a million. The soldiers were handed over at a border checkpoint.
Germany’s military planners warn that cyberattacks, sabotage, and disinformation could signal the start of a new war, according to a confidential government document seen by Politico. The plan outlines how Germany would defend itself in a major NATO conflict.
Organisers in New York have successfully completed a test run of the Times Square New Year’s Eve crystal ball, less than 48 hours before the annual countdown celebration.
Protests in Iran over soaring prices and a plunging rial have spread to universities in Tehran, as students join shopkeepers and bazaar merchants in demanding government action. With inflation above 42% and the rial at record lows, unrest continues to grow across the country.
Roman Abramovich, the Russian billionaire and former Chelsea Football Club owner, has assembled a “top tier” legal team, including a former White House advisor, as he prepares for a legal battle in Jersey.
The head of Yemen’s Presidential Council, Rashad al-Alimi, has ordered all forces linked to the United Arab Emirates to leave Yemen within 24 hours.
Max Verstappen has been voted Formula 1’s driver of the year for a fifth straight season by team principals, despite narrowly missing out on the championship.
Syria’s permanent representative to the United Nations, Ibrahim Olabi, said Israel has occupied the Syrian Golan Heights for almost sixty years, and that the UN General Assembly this month once again reaffirmed Syria’s sovereignty over the region.
Russia launched an overnight drone attack on Ukraine’s Odesa region, damaging residential buildings and infrastructure, and injuring four people, including three children, according to regional authorities on Wednesday.
Thailand released 18 Cambodian soldiers on Wednesday, ending their 155-day detention. This comes after a ceasefire agreement between the two countries halted 20 days of fighting that killed over 100 people and displaced more than half a million. The soldiers were handed over at a border checkpoint.
Germany’s military planners warn that cyberattacks, sabotage, and disinformation could signal the start of a new war, according to a confidential government document seen by Politico. The plan outlines how Germany would defend itself in a major NATO conflict.
Organisers in New York have successfully completed a test run of the Times Square New Year’s Eve crystal ball, less than 48 hours before the annual countdown celebration.
Bulgaria is preparing to replace its national currency, the lev, with the euro on 1 January, a long-awaited move welcomed by businesses but viewed with scepticism and anger by some citizens.
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