Federal Reserve cuts interest rates by 25 basis points in split decision
The Federal Reserve cut interest rates by a quarter point on Wednesday.
Capital Economics, among other Wall Street firms, called the decision a “hawkish cut” as the Fed backed away from more aggressive rate cuts in 2026.
“The New Summary of Economic Projections (SEP) shows the FOMC still expects another rate cut next year, but even if we exclude Stephen Miran’s extreme views, the forecast range is unusually wide. Either way, we doubt the Fed will cut rates again until a new Chairman replaces Jerome Powell in May,” Capital Economics economist Stephen Brown wrote in a note to clients.
The Fed expects another interest rate cut next year, according to the latest dot chart released alongside the Summary of Economic Projections (SEP) on Wednesday.
Beyond Stephen Miran, who called for a 50 basis point rate cut, there were two other dissenters, with Kansas City Fed president Jeffrey Schmid and Chicago Fed president Austan Goolsbee opting for no rate cut at this meeting.
Brown added: “Unsurprisingly given this divide, the statement signaled a pause from here, stating that the FOMC will now consider the ‘scope and timing of additional adjustments to the target range.'”
