The Federal Reserve approved its second interest rate cut despite a lack of recent economic data due to the government shutdown. The rate was lowered to 3.75%-4%, setting benchmarks for consumer products. The Fed also announced the end of quantitative tightening on Dec 1 and expressed concerns about the job market.

Even before the shutdown, evidence showed a slowdown in hiring and elevated inflation. The Fed aims to balance full employment and stable prices. The end of quantitative tightening was anticipated by markets and will involve reinvesting maturing securities into shorter-term bills. The decision could impact market conditions and inflation levels.

The Fed’s decision to end quantitative tightening and cut interest rates comes amid a record high stock market and strong earnings season. While easing policy may boost stock prices, it also raises concerns about higher inflation. The Fed could potentially restart asset purchases in the future as market conditions evolve.

Read more at CNBC: Fed rate decision October 2025