The Federal Reserve lowered its benchmark interest rate by 0.25%, bringing it to roughly 3.6%, and indicated it may pause additional cuts for now. While the reduction could eventually ease mortgage rates, the impact won’t be immediate.
WASHINGTON — The Fed cut its key interest rate for the third consecutive meeting on Wednesday but suggested it may hold rates steady in the coming months — a stance likely to frustrate President Donald Trump, who has pushed for more aggressive reductions.
After its two‑day meeting, the Fed’s policy committee signaled a willingness to keep rates unchanged for a period. In newly released quarterly projections, officials also indicated they expect to cut rates only once in the coming year.
The latest reduction brings the benchmark rate to its lowest level in nearly three years. Lower Fed rates can gradually reduce borrowing costs for mortgages, auto loans, and credit cards, though broader market conditions also play a role.
The decision drew three dissents — the most in six years — highlighting growing divisions within a committee that typically strives for consensus. Two officials favored holding rates steady, while Stephen Miran, appointed by Trump in September, argued for a larger half‑point cut.
Looking ahead, December’s meeting could mark a more contentious phase for the central bank. Policymakers remain split between those who want further cuts to support hiring and those who prefer to hold steady due to inflation still running above the Fed’s 2% target. Unless inflation clearly moves back toward that goal or unemployment deteriorates, the divide is likely to persist.