Fed Cuts Rates 25 bps for 2nd Time in 2025: Rejects Trump’s Aggressive Demands Amid Shutdown Data Blackout
**Jerome Powell just handed President Trump a *partial victory*—slashing the *federal funds rate* by 25 basis points to 3.75%-4%—but snubbed calls for massive cuts, warning a December move “not a foregone conclusion” as inflation lingers at 3% and shutdown fog blinds the Fed.
The FOMC’s 10-2 vote—2nd cut since September—targets a flagging labor market with job gains slowing and unemployment risks rising amid Trump’s tariffs jacking prices. Trump appointee Stephen Miran dissented AGAIN, pushing 50 bps—echoing his September revolt—while Kansas City’s Jeffrey Schmid wanted zero cut over sticky inflation.
Powell presser bombshells:
- QT ends Dec. 1: $6.6T balance sheet stops shrinking—liquidity flood incoming.
- December? “Strongly differing views”—odds plunge from 90%+ to ~70%.
- Tariffs = inflation culprit: “Pushing up prices”—but transient?
Markets whipsawed: S&P hit records pre-Powell, then trimmed gains—Dow -0.2%, Nasdaq flat—as 10Y yield spiked 10 bps.
X erupts—@DeItaone: “S&P turns negative” (74K views). @atrupar: Tariffs clip (2K likes). MAGA cheers: “Trump pressure WORKS!”
U.S. families win: Cheaper mortgages (~6.5%), credit cards, auto loans—savings $1K+/yr for avg household. But shutdown Day 30 delays jobs data; 42M SNAP at risk. Economy? Moderate growth, AI boom cash-fueled—not rate-sensitive.
Trump’s Fed purge looms: Cook sued over firing; Powell replacement eyed. Bigger cuts ahead? Midterms 2026 heat.
Fed rate cut 2025, Trump Fed pressure—Powell bends, but doesn’t break.
By Sam Michael
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Fed rate cut October 2025, FOMC second rate cut 2025, Jerome Powell Trump rate demands, federal funds rate 3.75-4%, Fed QT ends December, Stephen Miran 50 bps dissent, Trump tariffs inflation, Powell December cut uncertain, Fed labor market weakness, government shutdown Fed data**