Dec. 10 (UPI) — The Federal Reserve slashed its benchmark interest rate in an effort to boost hiring despite rare public disagreement among policymakers.
On Wednesday, the Federal Open Market Committee signed off on its third-straight cut by a quarter percentage point, bringing interest rates down to a range of 3.5% to 3.75%, CNBC News, The Hill and CNN reported.
It wasn’t expected to be a unanimous decision, NPR reported, same as the past two rate cuts.
The FOMC approved the rate cut on a 9-3 vote in a narrower margin than typical.
Board member Stephen Miran pushed for a larger 0.5 point reduction, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid opposed any rate cut.
It was Miran’s third “no” vote.
Lowering federal interest rates is expected to lower car and credit card payments, boosting spending during a hiring slump. However, doing so threatens to worsen inflation, which has been on the rise.
In October, Federal Reserve Chairman Jerome Powell warned the United States has “one tool” when it comes to fixing employment and inflation woes.
“You can’t address both of those at once,” Powell said at a news conference.
ABC News reported that despite some disagreement among the FOMC about whether to further cut rates, there’s been more openness to do so among members. The CME FedWatch Tool, which measures market sentiment, showed an 87% chance of a cut, up from 30% in November.
Bill English, former director of monetary affairs at the Fed and a current Yale professor, told CNBC to be prepared for the FOMC to cut but to hold rates for the foreseeable future.
“The likeliest outcome is a kind of hawkish cut where they cut, but the statement and the press conference suggesting that they may be done cutting for now,” he said.
Complicating matters is a like of economic data from the government as a result of the six-week government shutdown.
October’s numbers were largely skipped and November’s have been delayed.
Meanwhile, the Fed is mapping out at least one cut in 2026.
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook and the balance of risks,” the FMOC said in a repurposed post-meeting statement.
