Federal Reserve cuts rates

Source: Dukascopy Bank SA
The Federal Reserve announced key monetary policy actions effective October 30, 2025. It lowered the interest rate paid on banks' reserve balances to 3.9% and set the federal funds target range at 3.75% to 4%. The primary credit rate, which banks pay for short-term loans from the Fed, was cut to 4.0%. To maintain these rates, the Fed will conduct open market operations, including overnight repurchase agreements with a 4% minimum rate and a $500 billion limit, and overnight reverse repos at 3.75% with a $160 billion per-counterparty limit.



The Fed will continue rolling over or reinvesting principal payments from maturing Treasury and agency securities, following monthly caps for October and November, and starting December 1 will fully reinvest all payments. Small adjustments are allowed for operational reasons. Overall, these measures aim to ease monetary conditions while supporting liquidity and stability in the financial system.

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