Fed Cuts Interest Rates by 0.25% in Second Straight Meeting

The Federal Reserve cut interest rates by a quarter percentage point for the second meeting in a row, even as the government shutdown has left policymakers without key data to guide monetary policy, Jennifer Schonberger reported for Yahoo Finance.

President Trump’s newly appointed governor, Stephen Miran, dissented, preferring a half-point cut, while Kansas City Fed President Jeff Schmid favored holding rates steady.

The Fed voted, in a split decision, to cut its benchmark interest rate to a range of 3.75% to 4.00%.

President Trump’s newly appointed governor, Stephen Miran, dissented, preferring a half-point cut, while Kansas City Fed President Jeff Schmid favored holding rates steady.

Miran said ahead of the Fed meeting that he was concerned renewed trade tensions with China posed risks to the economic outlook.

He also said he’d like to bring rates down to a neutral setting — a level designed to neither spur nor slow growth — more quickly than his colleagues, because he doesn’t see tariffs leading to higher inflation and wants to avoid harming the labor market.

Schmid has said inflation remains too high and that the previous level of interest rates was the “right place to be.”

He has cautioned that aggressively boosting demand could increase the risk of an outsized rise in prices as firms gain pricing power and pass more tariff costs on to consumers.

Not since September 2019 have there been dissents on both sides of a Fed interest rate decision.

In its policy statement, the Fed acknowledged that the ongoing government shutdown has muddied data collection efforts and prevented officials from having a complete picture of the U.S. economy, noting that its assessment is based on “available indicators.”