On Wednesday, the Federal Reserve cut interest rates by 25 basis points as widely expected, lowering the benchmark federal funds rate range by 25 basis points to 3.50% to 3.75%. That marked the third consecutive quarter of declines and brought short-term borrowing costs to their lowest level since 2022.
Today’s rate cut is particularly noteworthy given the unusually wide public disagreement among Fed members over the course of monetary policy. In recent weeks, some have voiced their opposition loudly and in advance, not only to today’s easing but also to the 25 basis point cut in interest rates at the central bank’s last meeting in October.
The move comes as policymakers continue to operate but several key economic data are still being delayed or suspended due to the U.S. government shutdown. President Trump’s continued attacks on current Fed Chairman Jerome Powell and his search for a replacement when Powell’s term as chairman ends next year are also a factor.
Attention now turns to Powell’s post-meeting press conference at 2:30 p.m. ET, where listeners will try to learn more about his and the Fed’s thoughts on the future path of monetary policy.
