Oil prices ease after Fed delivers first 2025 rate cut

Crude prices slipped Wednesday after the U.S. Federal Reserve cut its benchmark interest rate by 25 basis points — the first reduction since December 2024 — and signalled that more easing could follow this year.

The move, supported by all but one policymaker, saw newly appointed Governor Stephen Miran cast the lone dissenting vote. Miran previously served as chair of President Donald Trump’s Council of Economic Advisers.

By mid-afternoon trading in New York, Brent crude for October delivery was down 0.85% at $67.92 a barrel, while West Texas Intermediate fell 0.79% to $64.02. Analysts said cheaper borrowing costs could eventually boost energy demand, but market caution prevailed amid economic uncertainty.

The Fed pointed to worsening labor market conditions as the main factor behind its decision, while suggesting tariff-driven inflation pressures may be short-lived. U.S. payroll growth has slowed sharply, averaging just 29,000 jobs a month over the past three months — the weakest pace in 15 years outside of the pandemic. Job openings have dropped below the number of unemployed workers, and long-term joblessness has reached its highest since 2021.

A preliminary revision to government data also showed the economy added about 911,000 fewer jobs in the year through March 2024 than previously estimated.

“The jobs market is in an even more precarious position than we thought,” said Sarah House, senior economist at Wells Fargo. “We’re already entering this rough patch from a weaker footing.”