The Federal Reserve has approved its second consecutive interest rate cut, continuing to recalibrate monetary policy amid signs of a cooling yet resilient economy.

The Federal Open Market Committee (FOMC), the Federal Reserve’s policy-making body responsible for overseeing the nation’s open market operations, lowered its key overnight borrowing rate by 25 basis points, setting a new target range of 4.50 to 4.75 percent.

This quarter-point reduction follows September’s significant half-percentage-point cut and aims to fine-tune monetary policy amid steady economic growth and inflation that remains above target.

Despite a solid 2.8 percent increase in gross domestic product in the third quarter, labor market conditions have shown signs of easing. Recent data indicate that the unemployment rate has ticked, though it remains relatively low. Inflation has inched closer to the Fed’s 2 percent target but continues to present challenges.

According to the FOMC statement:

Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated.

The Committee remains focused on achieving maximum employment and price stability. While acknowledging balanced risks to these goals, it recognizes the economic outlook’s inherent uncertainties. The FOMC will closely monitor economic data and remain prepared to adjust policy as needed.

The Fed’s quantitative tightening efforts also continue, with reductions in holdings of Treasury securities and mortgage-backed securities still in place. Depending on the evolving economic landscape, the market looks ahead to a potential further rate cut in December.

Read the complete FOMC statement for more information.

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