US Fed Meeting 2025 LIVE: Markets Slip as Powell Hints at No December Rate Cut; US-China Trade Deal in Focus

The US Federal Reserve, led by Chair Jerome Powell, announced a 25 basis point rate cut, bringing the benchmark federal funds rate to a range of 3.75%–4.00% after its two-day Federal Open Market Committee (FOMC) meeting on Wednesday, October 29, 2025. The decision was largely in line with market expectations, but Powell’s cautious tone on future rate cuts rattled investors.

Despite the rate reduction, US markets fell in after-hours trading as Powell indicated that the central bank may not implement another cut in December, citing persistent inflationary pressures and a need to assess upcoming economic data.

“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 one-quarter percentage point,” the Fed said in its official statement.

Inflation and Economic Outlook

The Fed’s decision comes as consumer inflation remains sticky, with the CPI rising 3% year-on-year in September 2025, compared to 2.9% in August. The central bank noted that future decisions will depend on the “evolving outlook” and the “incoming data” that shape the overall risk balance in the economy.

Recap: September 2025 Policy Move

In its September 17, 2025 meeting, the Fed had cut rates by 25 bps to 4.00%–4.25%, marking the first rate reduction since December 2024. That move, which came shortly after US President Donald Trump’s return to office, had raised hopes for a series of rate cuts throughout 2025 to stimulate growth.

Market Reactions and Global Impact

Analysts say the Fed’s cautious stance could limit risk appetite in the short term. However, investors are watching US-China trade negotiations closely, with a potential new trade deal expected to set tariff rates between 16% and 18%.

Nachiketa Sawrikar, Fund Manager at Artha Bharat Global Multiplier Fund, said:

“We may see an additional one or two rate cuts in 2026. When the Fed lowers rates, capital tends to move from safe assets like Treasuries into equities and emerging markets. India, with strong domestic fundamentals, could be a major beneficiary.”

Indian markets have already rallied on expectations of increased capital inflows amid easing US interest rates and strengthening bilateral trade prospects.