02:54 PM EDT, 10/29/2025 (MT Newswires) -- The Federal Reserve lowered its benchmark lending rate by 25 basis points Wednesday and reiterated concerns regarding the labor market.

The central bank's Federal Open Market Committee lowered interest rates to a range of 3.75% to 4%, in line with Wall Street's expectations and marking a second-consecutive quarter-percentage-point cut.

Two officials dissented from the majority, with recently appointed Fed Governor Stephen Miran preferring a 50-basis-point cut and Kansas City Fed President Jeffrey Schmid voting in favor of leaving rates unchanged, according to the FOMC.

"Job gains have slowed this year, and the unemployment rate has edged up, but remained low through August; more recent indicators are consistent with these developments," the FOMC said Wednesday following its two-day meeting.

"Downside risks to employment rose in recent months," the committee added, echoing remarks from last month.

Oxford Economics said today's decision was largely expected, but "the unexpected hawkish dissent from a regional Fed president highlights that future moves are becoming more contentious."

"A December cut remains a close call amid the shutdown-driven data blackout," Oxford Deputy Chief US Economist Michael Pearce said in remarks e-mailed to MT Newswires. "Our forecast is for the Fed to remain on pause over coming months and deliver three cuts at a quarterly pace in 2026."

Earlier this month, global outplacement firm Challenger Gray & Christmas said US job cuts in 2025 will likely surpass a million for the first time since 2020, while Automatic Data Processing ( ADP ) reported that US private jobs decreased by 32,000 last month.

Last week, official data showed that US consumer prices grew less than expected in September, while core inflation surprisingly ticked down. Annually, inflation accelerated to 3% from August's 2.9%, coming in below Wall Street's 3.1% estimate.

The inflation report was originally slated for an Oct. 15 release, but was rescheduled due to the ongoing US federal government shutdown, which has delayed key economic data, including the official September jobs report.

"Inflation has moved up since earlier in the year and remains somewhat elevated," the FOMC said Wednesday. "Available indicators suggest that economic activity has been expanding at a moderate pace."

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