Federal Reserve Cuts Rates by 25 Basis Points, Signals Two More in 2026

The Federal Reserve cut its benchmark interest rate by 25 basis points to a range of 4.00%-4.25%, its second reduction of 2026. Chair Jerome Powell told reporters the labor market has come into better balance and that the disinflation process is 'broadly on track'. The updated dot plot showed a median expectation of two additional cuts before year-end. Equity markets rallied and the dollar weakened against major peers.