11/10/2025. Another Rate Cut for the Books
- George Zhuang
- Nov 10
- 3 min read
Updated: Nov 10
By now, you may have heard about the recent cut to short-term borrowing rates the Federal Reserve performed at the end of October. Due to web development and other considerations, I am unfortunately a little late on breaking this news.
Nonetheless, the rate cut decision by the Federal Reserve is significant and attention should be brought upon it! With inflation statistics still not being published due to the Federal government shutdown, though the Senate now appears to have a workable deal on the table, the Federal Reserve Board has made a judgment call to cut rates further from 4.00-4.25% down to 3.75-4.00%.
Concerns about quantitative tightening, whereby the Federal Reserve sells down debt assets to reduce monetary supply, and monetary controls in general seem to be gaining significant traction as well due to pressure from Treasury Secretary Scott Bessent. These concerns appeared also to have credibility beyond partisan goals, when banks began reporting a lack of liquidity, leading in some instances to borrowing costs jumping above the Federal Open Markets Committee (FOMC) federal fund rates target.
This quarter-point rate target cut may encourage more borrowing in an economy that has uncertain inflationary prospects, the results of which may vary. To this effect, Fed Reserve Chair Jay Powell is maintaining his rhetoric that December rate cuts are not set in stone, and considerations other than the health of the economy for high-income Americans may be a driving factor in rate decisions going forward. This messaging by Powell is significant because of the apparent fracturing of the U.S. economy into a high-income economy whereby individuals and families are more than willing to spend as they view their economic prospects improving, and a low-income economy whereby individuals are much more pessimistic about the economy and are much less willing to spend down their savings.
Whether you fall in the high-income or the less-than-high-income demographic, it is never a bad idea to stay prepared by reviewing and re-positioning your investments and financial plan as the world evolves. Plan, Invest, and Protect with A.G. Advisory.
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