US Fed Divided as It Approves Second Straight Rate Cut
Omoyeni Olabode
The US Federal Reserve on Wednesday announced its second consecutive quarter-point rate cut, lowering its key lending rate to between 3.75% and 4.00%. The move, aimed at supporting the slowing labour market, revealed growing divisions among policymakers, with a 10–2 vote outcome.
Fed governor Stephen Miran pushed for a larger half-point cut, while Kansas City Fed president Jeff Schmid preferred maintaining current rates. The decision comes as the US economy contends with President Trump’s tariff policies and a prolonged government shutdown.
Analysts have warned the cut may be premature, with Moody’s describing it as a “tactical error” amid persistent inflation.
The Fed also confirmed plans to end quantitative tightening by December 1, marking an end to balance sheet reductions that began after the pandemic stimulus period.
Market watchers remain uncertain about another rate cut in December, as Chair Jerome Powell keeps future decisions open, balancing concerns over inflation and economic slowdown.
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