The US Federal Reserve lowered interest rates by 25 basis points on Wednesday, bringing the federal funds rate to 3.5-3.75% in its third monetary policy adjustment this year. The move comes as policymakers balance labor market stability with persistent inflation pressures exacerbated by trade policies.
Fed Chair Jerome Powell emphasized the cumulative 75-basis-point reduction since September 2025, stating: "We are well positioned to wait and assess economic evolution." He attributed recent cuts to mitigating tariff-related inflation spikes while maintaining employment growth, with a long-term target of 2% inflation.
The decision drew criticism from former US President Donald Trump, who called for more aggressive action: "This cut should have been at least doubled." Trump has repeatedly pressured the Fed to accelerate rate reductions despite improving GDP figures.
Asian markets showed mixed reactions during Thursday trading, with analysts noting potential benefits for export-driven economies through dollar depreciation. Business leaders across Southeast Asia are monitoring how the Fed's stance might influence regional central banks' policies in early 2026.
