**Federal Reserve Cuts Rates by Quarter-Point, Signals Cautious Outlook for Future Cuts**
The Federal Reserve has reduced the federal funds rate by a widely anticipated quarter-point, setting the new target range at 3.50% to 3.75%.
The decision revealed a divided Federal Open Market Committee (FOMC). Three members dissented, highlighting differing opinions on the appropriate path for monetary policy. Governor Stephen Miran advocated for a larger half-point cut—for the third straight meeting. Meanwhile, Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee voted to maintain the current rate.
Market expectations for the Fed’s next move in December have fluctuated significantly since the October 29 FOMC meeting. At that time, Chair Jerome Powell signaled that a rate cut was not a foregone conclusion. The recent government shutdown has further complicated matters by delaying key economic data, deepening uncertainty and exacerbating divisions within the Committee.
The Fed’s latest move suggests a higher threshold for future rate reductions, as policymakers continue to weigh signs of economic slowdown against inflation risks and incomplete data.
