The U.S. Federal Reserve delivered a widely expected 25 basis point rate cut on Wednesday, lowering the range on its benchmark fed funds rate by 25 basis points to 3.50% to 3.75%. This marks the third straight quarter point reduction and brings short-term borrowing costs to their lowest level since 2022.
“Uncertainty about the economic outlook remains elevated,” said the Fed in its policy statement. “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.”
The price of bitcoin was volatile in the minutes following the news, but remaining around the $92,400 level. U.S. stocks moved modestly higher and the 10-year Treasury yield dipped two basis points to 4.15%
Today’s rate cut is of particular note given the unusually large amount of public dissension among Fed members about the course of monetary policy. Several in recent weeks had loudly voiced their opposition ahead of time to not just today’s easing, but also the central bank’s 25 basis point reduction at its previous meeting in October.
Indeed two members — the Kansas City Fed’s Jeffrey Schmid and the Chicago Fed’s Austan Gollsbee — voted to hold policy steady. A third member, Fed Governor Stephen Miran — a recent Trump appointee — voted for a 50 basis point cut.
The move comes at a moment when policymakers are still operating without several key economic data releases that remain delayed or suspended due to the U.S. government shutdown. Also at play is President Trump’s continued bashing of current Fed Chair Jerome Powell alongside his search for a replacement when Powell’s term as chair ends next year.
Attention now turns to Powell’s post-meeting press conference at 2:30 pm ET, where listeners will try and further discern his and the Fed’s thoughts on the future path of monetary policy.
