The Federal Reserve lowered its benchmark interest rate by a quarter percentage point on Wednesday, shifting its federal funds target range to 3.75–4 percent. 

Federal Reserve officials cited recent indicators showing moderate economic growth but noted that job gains have slowed and unemployment, while still low, is trending upward. Inflation, meanwhile, has risen since earlier in the year and “remains somewhat elevated.”

Alongside the rate cut, the Federal Open Market Committee (FOMC) announced it will halt reductions of the Fed’s aggregate securities holdings effective December 1. This move signals a shift in the Fed’s approach to tightening, possibly to maintain sufficient liquidity and avoid adding stress to financial markets.

The vote reflected a split among Fed policymakers. While Chair Jerome Powell and most committee members supported the 0.25-point rate cut, two members dissented: Stephen Miran argued for a larger, half-point cut, potentially signaling a greater perceived threat to economic growth, while Jeffrey Schmid advocated for holding rates steady.

Fed officials signaled they would make future rate decisions based on evolving economic data and the balance of risks. The FOMC emphasized its readiness to adapt monetary policy if warranted by incoming labor, inflation, or international economic developments.