US Fed Meeting 2025: FOMC Cuts Rate by 25 bps to 3.50%--3.75%; Markets, Gold, Rupee React--LIVE Updates

The US Federal Reserve, with Jerome Powell as its Chair, is cutting the rate again by 25 basis points, leading to a federal funds rate of 3.5%-3.75%. This is the third cut of 2025 and the US still has the inflation rate that is above the desired level plus the labor market is getting weaker still.

The move anticipated widely by the market, at once changed the global investor mood and along with it the reactions in the stock market, commodities, currencies, and emerging markets such as India.

The Fed communicated that the decision is a reflection of the changing risks with the slow growth and the increasing unemployment now surpassing the persistent inflation. Nevertheless, the Central banks are still split, which is pointing at the uncertainty of the interest rate direction for 2026.

What the Fed Announced—Key Highlights

Policy rate cut: 25 bps, which reduces the upper limit of the new range to 3.50%–3.75%

Reason: High inflation, weak labor market, and low economic activity

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Committee split: 9–3 vote, still cautious and showing different opinions

Additional step: Fed's new short-term Treasury securities purchase program worth about $40 billion to support liquidity

Outlook: One more rate cut in 2026 which will depend on inflation and jobs reports

The total rate reduction by the Fed has been 75 bps since September 2025. The period before this reduction cycle was characterized by the central bank's decision to keep the interest rates steady for almost a year.

Why the Fed Cut Rates—The Economic Picture

The US market for labor has become drastically less tight:

Unemployment rate: 4.4%

New jobs created: 119,000 (weak by US standards)

Inflation: It is still above the 2% target partly due to tariffs on imports

Consumer spending has remained solid, however, some sectors like housing have difficulties. With the transition of the Fed Chair in 2026, policy uncertainty will be very high.

Global Market Reaction—LIVE Updates

1. Indian Markets Edge Higher

The Sensex and Nifty staged a minor recovery from three days of losses opening slightly in the green. A gentler Fed policy has lessened the pressure of foreign outflows.

2. Gold & Silver Surge to Record Highs

The lower rates were a boost for the precious metals:

Gold: sharp increase at MCX

Silver: another all-time high

And global gold futures also recorded over 1% rise.

3. Dollar Weakness; Rupee Steady

The Indian rupee started off at 89.98 per dollar, which was practically no change, since there is a more stable global rate scenario.

4. Crypto Drops

The two cryptocurrencies fell Bitcoin and Ethereum by nearly 3% due to Powell's cautious comments that had a negative effect on the risk sentiment.

5. Mild Response from Crude Oil

Oil prices did not budge much despite the drawing down of US stockpiles and geopolitical tensions.

Analyst Views—What Experts Are Saying

Rajesh Palviya (Axis Securities):

The Fed's action is a plus for the global equities market, and there can be some buying interest in Indian financials, consumption, and rate-sensitive sectors.

Ravi Singh (Master Capital):

The cut in rates is a sign of support for gold and silver; emerging markets like India might reap the benefit of a soft dollar.

Ionic Wealth:

If the Trump administration is to return to Fed leadership, then the cutting of rates might be deeper in 2026.

Brickwork Ratings:

The rupee will probably remain below 90/USD throughout 2025 before it strengthens in 2026.

TrustLine Holdings:

The huge $40-billion liquidity injection by the Fed was the major surprise rather than rate cut itself.

What This Means for India

Lower global liquidity volatility

More favorable environment for Indian SMEs and MSMEs to get credit

Possibly improved FPI inflows

Supportive macro backdrop for 2026 expansion plans

Strong gold forecast, mixed for equities