Washington, D.C. — The Plastics Industry Association (PLASTICS) Chief Economist, Dr. Perc Pineda, has released a new economic analysis examining how recent Federal Reserve rate cuts and tax policy changes could shape the outlook for U.S. plastics manufacturing.
Dr. Pineda explains, “The Federal Reserve cut the federal funds rate by 25 basis points at the Federal Open Market Committee (FOMC) meeting on October 28–29, 2025, bringing the target range to 3.75%–4.0%. This marks the second rate cut this year, totaling 50 basis points. Although the market is pricing in another cut before year-end, monetary policy is not on a preset course.
In theory, lower interest rates should spur higher investment spending, which in turn boosts income and likely leads to increased consumer spending. This feedback loop should push production curves upward across the plastics industry’s value chain. We observed a slowdown in plastics production when the federal funds rate reached 4.0%; however, monetary policy lags will influence how quickly lower rates translate into increased investment—particularly in plastics end markets—from compounding and tooling to full-scale production,” concludes Dr. Pineda.
Click here to read the full analysis on the PLASTICS blog.
About the Plastics Industry Association
The Plastics Industry Association (PLASTICS) supports the entire plastics supply chain, including Equipment Suppliers, Material Suppliers, Processors, and Recyclers, representing over one million workers in our $551 billion U.S. industry. PLASTICS advances the priorities of our members who are dedicated to investing in technologies that improve capabilities and advances in recycling and sustainability and providing essential products that allow for the protection and safety of our lives. Since 1937, PLASTICS has been working to make its members, and the eighth largest U.S. manufacturing industry, more globally competitive while supporting circularity through educational initiatives, industry-leading insights and events, convening opportunities and policy advocacy, including the largest plastics trade show in the Americas, NPE: The Plastics Show.
