US Federal Reserve cuts interest rates in final decision of the year

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In December 2025, the US Federal Reserve cut interest rates by a quarter of a percentage point, setting the new rate between 3.50-3.75 percent. This marks the third rate cut of the year and the last one for 2025. The decision was influenced by concerns over slowing job growth and slightly elevated inflation. The Fed's decision was complicated by gaps in economic data due to a recent 43-day government shutdown, which hindered the ability of agencies like the Department of Labor to collect necessary information. The central bank primarily relied on data from September, which showed a slight rise in unemployment and core inflation. The Fed indicated a potentially more cautious approach to future rate cuts due to the uncertainty in the economic outlook.
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