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The Federal Reserve cut interest rates by 25 basis points, lowering the benchmark rate to a range of 4.50% to 4.75%. This decision, the second rate cut this year following a 50 basis point reduction in September, aims to address ongoing inflation and a slowing labor market. The Fed noted that while inflation is progressing towards its 2% target, it remains somewhat elevated. The October jobs report, which was weaker than expected, influenced this decision.

The core PCE index, the Fed's preferred measure of inflation, showed a 2.7% increase in September, slightly above expectations. This rate cut occurs amid a significant political shift, with Donald Trump being elected president again. Although his potential policies, such as higher tariffs and tax cuts, could lead to higher inflation and policy uncertainty, they are not expected to immediately change the Fed's rate-cut trajectory for this year.