Overview
- The Federal Reserve lowered the federal funds rate by 25 basis points to 3.5%–3.75%, its third cut this year, in a 9–3 vote that marked the most dissents since 2019.
- Jerome Powell cautioned that payrolls may have been overstated by roughly 60,000 jobs per month since April and warned that tariff-driven goods prices tilt near-term inflation risks higher.
- Officials’ projections point to a median of just one rate cut in 2026, revealing a wide dispersion of views as markets price in the possibility of more easing than the Fed’s outlook.
- Chicago Fed President Austan Goolsbee said he dissented to wait for fresh inflation and labor data, Kansas City’s Jeffrey Schmid favored holding steady, and Governor Stephen Miran preferred a larger cut.
- Treasury yields edged higher Friday as investors assessed the decision and leadership uncertainty, with President Trump interviewing candidates — including Kevin Hassett and Kevin Warsh — after Treasury Secretary Scott Bessent submitted five names.