Federal Reserve cuts US interest rates in another divided vote

The latest official data on unemployment and inflation is for September and shows the unemployment rate rising from 4.3 percent to 4.4 percent, while the Fed’s preferred measure of inflation also rose from 2.7 percent to 2.8 percent. The Fed has a 2 percent inflation target, but the pace of price increases has increased steadily from 2.3 percent in April; This is at least partially attributable to the pass-through of increased import duties to consumers and the driving force behind the central bank’s policy divergence.

Employment and inflation data for November will be released next week, followed by a detailed economic growth report for the third quarter.

“Current indicators indicate that economic activity is expanding at a moderate pace,” the Fed said in its statement.

“Employment gains have slowed this year, and the unemployment rate rose through September,” he said, dropping the “low” reference to the unemployment rate.

Forecasts showed that a core of six policymakers favored no rate cuts this year, and seven policymakers predicted no further rate cuts in 2026.

The median forecast calls for an additional quarter-point cut on top of inflation in 2027
It continues to fall towards the Central Bank’s 2 percent target.

Reuters

The Business Briefing newsletter delivers big stories, exclusive news and expert insights. Sign up to receive it every weekday morning.