Overview
- The Federal Reserve lowered the federal funds rate to a 3.75–4.00% range, citing growing downside risks to employment during a government data blackout.
- The vote was divided, with 10 policymakers backing the quarter-point move, Jeffrey Schmid opposing any cut, and Stephen Miran arguing for a larger reduction.
- Inflation near 3% in September remains above the 2% goal, underscoring the Fed’s trade-off between price stability and maximum employment.
- Powell described sharply divergent views on the path to December, pushing back on market assumptions that further easing this year is assured.
- Trump has pressed for deeper cuts and installed ally Stephen Miran on the board, intensifying scrutiny of the Fed’s independence as easier policy lowers borrowing costs but trims returns for savers.