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Federal Reserve Expected to Cut Rates Amid Shutdown

10/22/2025

48 9 Full Breakdown

Summary

Story summary

The Federal Reserve, the U.S. central bank, is seen cutting rates five times by 2026 due to the shutdown.
Treasury yields fell as traders priced in cuts, and the yield curve flattened, signaling slower growth.
The shutdown delayed key inflation data, and labor-market concerns grew as job growth slowed.
Gold prices rose on safe-haven demand amid expectations of lower rates.

History

Historical Context

The 2008 financial crisis prompted the Federal Reserve to cut interest rates to near-zero, aiming to stimulate the economy. This followed a series of rate reductions from 5.25% in September 2007 to 0% by December 2008, as the crisis led to significant job losses and a recession. Today, anticipated rate cuts reflect ongoing economic challenges, including a government shutdown and slow job growth.

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Story summary

The Federal Reserve, the U.S. central bank, is seen cutting rates five times by 2026 due to the shutdown.
Treasury yields fell as traders priced in cuts, and the yield curve flattened, signaling slower growth.
The shutdown delayed key inflation data, and labor-market concerns grew as job growth slowed.
Gold prices rose on safe-haven demand amid expectations of lower rates.

1 / 2