2025 proved to be a turning point for the global economy. As inflationary pressure subsided, central banks had an opportunity to support growth.

In this video we understand why RBI and US Federal Reserve cut interest rates in 2025 and what effect it had on the economy. Taking advantage of low inflation, RBI in India cut the repo rate by a total of 125 basis points, which made borrowing cheaper and boosted consumption.

Inflation fell to a record low 0.25% in October 2025, giving space for aggressive monetary easing. At the same time, due to labor market slowdown in America, the Federal Reserve started rate cuts again in the second half of 2025. The impact of these policies was clearly visible on loans, investments and overall economic activity.