Fed Lowers Fed Funds Rate By 0.25% to A 3.75%/4.00% Target At October 2026 Meeting

Author: Ari Socolow on October 29, 2025

The Federal Reserve has lowered interest rates by 25 basis points at its October meeting. Its new rate target is 3.75% to 4.00%. The cut follows a 25 basis point cut in September.

The decision has two dissents, with one member arguing for no cut and one member arguing for a 50 basis point cut.

The Fed statement indicates that job gains have moderated and inflation has moved up. We seem to be entering a stagflationary environmment where anything that the Fed does risks exascerbating some pain for middle America. However, if the Fed continues to lower rates, wealthy Americans should fair well on market, and less well on their cash savings.

The Federal Reserve also announced that it is stopping quantitative easing and will no longer be selling its US Treasuries.

Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.