WASHINGTON: A divided US Federal Reserve lowered interest rates on Wednesday for a third consecutive time this year, flagging labour market concerns even as inflation remained elevated as President Donald Trump’s tariffs bite.
The cut by a quarter percentage point brings rates to a range between 3.50 per cent and 3.75pc, the lowest in around three years.
The move was in line with market expectations, although the path ahead is less certain.
The Fed penciled in at least one more rate reduction next year, and flagged heightened risks to employment as it announced Wednesday’s move.
But a rift within the central bank deepened with three officials voting against the modest reduction.
Chicago Fed president Austan Goolsbee and Kansas City Fed president Jeffrey Schmid instead sought to keep rates unchanged. Fed Governor Stephen Miran backed a bigger, half-percentage-point cut.
The Fed’s rate-setting committee consists of 12 voting members — including seven members of the board of governors, the New York Fed president and a rotation of reserve bank presidents — who take a majority vote in deciding the path of rates.
On Wednesday, Fed officials also lifted their 2026 GDP growth forecast to 2.3pc, from 1.8pc previously.
Published in Dawn, December 11th, 2025