Fed Cuts Interest Rates a Quarter Point with Mixed Vote

New York, NY, December 10, 2025-"Federal Reserve officials cut interest rates at their third consecutive meeting, but signaled a move to the sidelines amid unusual internal divisions over whether inflation or the job market should be their bigger worry,” reports the Wall Street Journal.

“The Fed voted 9-3 for the reduction on Wednesday, the first time in six years that three officials cast dissents. Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeff Schmid thought the reduction wasn’t warranted, while Fed governor Stephen Miran favored a larger, half-point cut.

“The decision to reduce the benchmark federal-funds rate by a quarter point-to between 3.5% and 3.75%, a three-year low-is aimed at protecting against a sharper-than-anticipated slowdown in hiring.

“With progress on inflation stalled, officials had indicated in the run-up to this week’s decision that further reductions could require evidence of labor-market deterioration. “We’re well positioned to wait and see how the economy evolves from here,” said Fed Chair Jerome Powell at a news conference.

“On Wednesday, their painstakingly calibrated postmeeting statement signaled a higher bar to additional cuts by echoing a similar pivot after cutting rates one year ago.

“Still, Powell defended the decision to cut now rather than wait until the Fed’s next meeting in late January, when it will have significantly more data that had been delayed due to this fall’s government shutdown.

“He suggested that after adjusting for overcounting, job growth may have been slightly negative since April. I think you can say that the labor market has continued to cool gradually, maybe just a touch more gradually, than we thought,’ Powell said.

“The Fed no longer described the unemployment rate, which ticked up to 4.4% in September from 4.1% earlier this year, as having “remained low” in its statement.

“Still, officials nudged up their growth estimates for next year, and Powell said he was hopeful that the Fed’s cuts would help support better hiring conditions.

“Not every Fed official who participates in the meeting has a vote on the committee. In new quarterly projections, six of 19 officials penciled in a year-end rate above the level before Wednesday’s cut-a sign that some voters backed the cut with reservations or that nonvoters were opposed.

“The projections also showed a majority of officials penciled in at least one reduction next year. That was the same as in September and suggests officials see little reason to accelerate the pace of easing.”