weakens

The United States Federal Reserve has cut its benchmark interest rate by 25 basis points to 3.75 – 4.00 percent, amid signs of a slowing labour market and continued pressure on consumer prices.

The cut, announced on Wednesday, marks the US central bank’s second rate cut this year.

“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. Inflation has moved up since earlier in the year and remains somewhat elevated,” the Fed said in a statement.

“Uncertainty about the economic outlook remains elevated.”

The cuts were largely in line with expectations. Earlier on Wednesday, CME Fed Watch — which tracks the likelihood of rate cuts — said there was a 97.8 percent probability of rate cuts.

After the September cut, economists had largely been expecting two additional rate cuts for the rest of this year. Goldman Sachs, Citigroup, HSBC, and Morgan Stanley, among others, forecast one more 25-basis-point reduction by year’s end following Wednesday’s cut. Bank of America Global Research is the only major firm that is not anticipating another 25-basis-point cut in 2025.

“The Fed has a challenging line to walk; lower interest rates to support labour markets and growth, or raise them to tamp down inflation. For now, they are taking a cautious approach tilted a bit towards the growth concerns,” Michael Klein, professor of international economic affairs at The Fletcher School at Tufts University in Massachusetts, told Al Jazeera.

Despite forecasts, Federal reserve chairman Jerome Powell isn’t necessarily inevitable.

“We haven’t made a decision about December,” Powell told reporters in a press conference.

“We remain well-positioned to respond in a timely way to potential economic developments.”

Government shutdown implications

The cuts come as economic data becomes increasingly scarce amid the ongoing government shutdown, now in its 29th day as of Wednesday, making it the second-longest in US history, behind the 35-day shutdown during the first presidency of Donald Trump in late 2018 and early 2019.

Because of the shutdown, the Department of Labor did not release the September jobs report, which was scheduled for October 3. The only major government economic data released this month was the Consumer Price Index (CPI), which tracks the cost of goods and services and is a key measure of inflation. The CPI rose 0.3 percent in September on a month-over-month basis to an inflation rate of 3 percent.

That data was released because the Social Security Administration required it to calculate cost-of-living adjustments for 2026. As a result, Social Security beneficiaries will receive a 2.8 percent increase in payments compared to 2025.

The shutdown, however, could have a bigger impact on next month’s central bank decision as the Labor Department is currently unable to compile the data needed for its November reports.

However, amid the limited government data, private trackers are showing a slowdown.

“We are not going to be able to have the detailed feel of things, but I think if there were a significant or material change in the economy one way or another, I think we would pick that up,” Powell said.

Consumer confidence lags

Consumer confidence fell to a six-month low, according to The Conference Board’s report that was released on Tuesday.

The data showed that lower-income earners – those making less than $75,000 a year – are less confident about the economy as fears of job scarcity loom. This comes only days after several large corporations announced waves of layoffs.

On Wednesday, Paramount cut 2,000 people from its workforce. On Tuesday, Amazon cut 14,000 corporate jobs. Last week, big box retailer Target cut 1,800 jobs. This, as furloughs and layoffs weigh on government workers. The US government is the nation’s largest employer.

Those making more than $200,000 annually remain fairly confident and are leading consumer spending that is keeping the economy afloat, according to The Conference Board.

Pressures both on consumer spending and the labour market are largely driven by tariffs weighing on consumers and businesses.

US markets are ticking up on the rate cut. The Nasdaq is up 0.5, the S&P 500 is up 0.1, and the Dow Jones Industrial Average is up by 0.26 as of 2pm in New York (18:00 GMT).

Oct. 1 (UPI) — The one-time Hurricane Imelda weakened to an extratropical cyclone Thursday after passing over Bermuda, the National Hurricane Center said.

The storm was about 315 miles east-northeast of Bermuda, according to the 11 a.m. EDT update — the last — from the NHC.

Forecasters said Imelda had maximum sustained winds of 75 mph and was moving east-northeast at a rapid 29 mph. The same general motion was expected to continue through Thursday night.

Bermuda has discontinued all tropical storm warnings associated with the storm.

Imelda, the ninth named storm of the 2025 Atlantic hurricane season, is expected to strengthen through Wednesday as it approaches Bermuda and could be a Category 2 storm by the time it nears the island.

Sept. 30 (UPI) — Humberto weakened to a Category 3 storm on Monday in the Atlantic, according to forecasters, who expected it to continue to lose strength over the next few days.

Humberto had maximum sustained winds of 115 mph, the National Hurricane Center said in its 11 p.m. AST update, a drop of 30 mph in the last 12 hours.

It was located about 265 miles southwest of Bermuda and was moving north-northwest at 14 mph, according to forecasters.

Hurricane-force winds extend outward up to 65 miles from the center of the storm, and tropical-force winds extend outward up to 200 miles.

No watches or warnings were in effect.

“On the forecast track, the center of Humberto will pass west and then north of Bermuda on Tuesday and Wednesday,” the NHC said.

Though the storm is expected to continue on its weakening trajectory, it is forecast to become a “strong extratropical system” in the next few days.

Swells generated by Humberto are likely to cause dangerous surf and life-threatening rip current conditions, affecting beaches of the northern Caribbean, Bahamas, Bermuda and much of the U.S. East Coast for the next few days.

Humberto is the eighth named storm of the Atlantic season and became the season’s third hurricane on Friday morning.

On Sunday, it was joined in the Atlantic by Tropical Storm Imelda.

Sept. 9 (UPI) — Hurricane Kiko was steadily weakening on Monday but remained a Category 1 storm, according to forecasters who predict it will pass north of the Hawaiian Islands in the next two days.

The storm had maximum sustained winds of 75 mph and was located about 300 miles east-northeast of Hilo, Hawaii, and 450 miles east of Honolulu, the National Hurricane Center said in its 5 p.m. HST update.

It was moving northwest at 14 mph, the center said.

On the forecast track, Kiko was expected to pass north of the Hawaiian Islands on Tuesday and Wednesday, the NHC said.

However, swells generated by the storm were gradually building from east to west across Hawaiian waters and are expected to peak Monday night through Wednesday.

“While the risk of direct impacts on the islands continues to decrease, interests should continue to monitor Kiko’s progress and the latest forecasts,” the NHC said in a discussion on the storm

The forecasters said they expect the storm to be downgraded to a tropical storm overnight.

Kiko had intensified to a Category 4 hurricane early last week, but was later downgraded as it weakened off the coast.

No watches or warnings were in place, the NHC said.

Sept. 4 (UPI) — Lorena weakened back to tropical storm strength Wednesday after spending about a day as a hurricane off the western Mexican coast, forecasters said.

The storm, which formed early Tuesday, was about 175 miles west of Cabo San Lazaro on the Baja California Peninsula, according to the National Hurricane Center in its 8 p.m. PDT update.

It had maximum sustained winds of 45 mph and was moving northwest at 5 mph.

The Mexican government canceled all watches and warnings associated with Lorena, but the NHC warned that areas in Baja California Sur and Sonora should monitor heavy rainfall across the region.

“This will increase the risk of life-threatening flash floods and mudslides across northwest Mexico,” the NHC said.

Forecasters also called for heavy rainfall in Arizona and New Mexico with flash flooding possible in Arizona.

Lorena, the 12th named storm in the Eastern North Pacific this year, formed as Hurricane Kiko continued to strengthen over the Pacific Ocean.

Sept. 4 (UPI) — Hurricane Kiko weakened to a Category 3 hurricane late Thursday as it made its way northwest toward the general direction of Hawaii, forecasters said.

Kiko had reached Category 4 strength late Wednesday but weakened to 125 mph maximum sustained winds in the National Hurricane Center’s 3 p.m. HST update. Despite the weakening, the storm is still considered a major hurricane that could cause severe damage if it reaches land.

The eye of the storm was located about 1,360 miles east-southeast of Hilo, Hawaii, and 1,565 miles east-southeast of Honolulu. It was traveling west at 9 mph and was expected to continue in that direction and toward the northwest over the next several days.

“Kiko is forecast to approach the Hawaiian Islands during the early to middle portion of next week,” the NHC said in a statement Thursday.

“The risk of direct impacts from wind and rainfall is increasing. However, it is too soon to determine the exact location or magnitude of these impacts, and interests there should continue to monitor the progress of this storm.”

The NHC said swells generated by Kiko could reach the Hawaiian islands toward the end of the weekend, causing life-threatening surf and rip currents.

There were no weather watches or warnings in effect because it was well away from land Thursday.

The storm formed on Sunday, making it the 11th named storm in the Eastern North Pacific this year.