{"id":353492,"date":"2025-12-17T08:24:27","date_gmt":"2025-12-17T08:24:27","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/353492\/"},"modified":"2025-12-17T08:24:27","modified_gmt":"2025-12-17T08:24:27","slug":"fed-cuts-interest-rates-by-a-quarter-point-amid-apparent-split-over-us-economy-federal-reserve","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/353492\/","title":{"rendered":"Fed cuts interest rates by a quarter point amid apparent split over US economy | Federal Reserve"},"content":{"rendered":"

The US Federal Reserve<\/a> announced on Wednesday that it was cutting interest rates by a quarter point for the third time this year, as the embattled central bank appeared split over how best to manage the US economy.<\/p>\n

The Fed chair, Jerome Powell<\/a>, has emphasized unity within the Federal Open Market Committee (FOMC), the board of Fed leaders that sets interest rates. But the nine-to-three vote to lower rates to a range of 3.5% to 3.75% was divisive among the committee that tends to vote in unanimity.<\/p>\n

The split highlights the overall uncertainty within the Fed<\/a> as the US economy absorbs major economic shakeups, including tariffs, changes to the labor force from Trump\u2019s immigration crackdown and massive government cuts.<\/p>\n

Making matters harder for Fed officials is the lack of comprehensive price and labor market data, the collection of which was halted during the government shutdown. And Trump is weighing his choice for replacing the Fed\u2019s chair.<\/p>\n

The latest economic data has shown slight increases to both inflation, which went from 2.3% in April to 3% in September, and unemployment, which went from 4% in January to 4.4% in September.<\/p>\n

The dual increases, while relatively small, put the Fed in a tough spot. Keeping rates too high could stall the economy, but bringing rates down too quickly could mean higher inflation.<\/p>\n

New projections from officials suggest hesitance to cut rates further next year, a refusal that could further rifts between the Fed and the White House. In a press conference on Wednesday, Powell said the Fed was trying to balance \u201csignificant downside risks\u201d in the jobs market with inflationary pressures from Trump\u2019s tariffs that are \u201cpretty clear to see\u201d.<\/p>\n

Powell repeatedly said official figures were likely currently overestimating the strength of job creation in the US. He said officials will \u201cneed to be careful\u201d in assessing economic data that will be released over the coming weeks on prices and the labor market due to the impact of the government shutdown on data collection.<\/p>\n

\u201cData was not collected in October and half of November, so we are going to get data, but we are going to have to look at it carefully and with a somewhat skeptical eye,\u201d he said.<\/p>\n

Earlier in the year, Fed officials said they were waiting to see how Donald Trump\u2019s tariffs would impact prices before making any changes to interest rates, pausing a rate cutting campaign that had started last fall.<\/p>\n

For months, Trump and his allies in the White House have publicly attacked Fed officials \u2013 typically, US presidents respect the nonpartisan nature of the central bank \u2013 for not lowering interest rates. Even with rising inflation, Trump has continued to insist<\/a> that any price increases are holdovers from Joe Biden\u2019s presidency, despite some corporate leaders saying that their price increases are directly attributed to tariffs.<\/p>\n

Next year, Powell\u2019s term as chair will be up in May, leaving room for Trump to nominate his pick for the most influential economic role in the country. Trump has suggested Kevin Hassett, the director of the National Economic Council, could be his nominee, though it is unclear how popular Hassett is among other Republicans.<\/p>\n

Hassett told Fox News on Wednesday that Trump will befinalizing his choice within the next few weeks.<\/p>\n

Asked about his legacy, Powell said: \u201cMy legacy? My thought is that I really want to turn this job over to whoever replaces me with the economy in really good shape.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The US Federal Reserve announced on Wednesday that it was cutting interest rates by a quarter point for…\n","protected":false},"author":2,"featured_media":353493,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":{"0":"post-353492","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/353492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=353492"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/353492\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/353493"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=353492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=353492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=353492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}