"The Federal Reserve dropped interest rates again Wednesday, despite complications caused by a data blackout during the government shutdown. As reported by The Wall Street Journal, the Fed made a quarter-point cut in the benchmark short-term interest rate, lowering it to a range between 3.75% and 4%, the lowest setting in three years and down from a peak of around 5.4% that the central bank maintained for much of last year."
"The vote was approved 10-2, with Kansas City Fed President Jeffrey Schmid voting no because he wanted the rate to remain the same, and Fed governor Stephen Miran voting no because he wanted a half-point, not quarter-point cut. As usual, the debate over cutting rates a move President Donald Trump has loudly supported is tempered by concerns about inflation, which is currently at almost 3%."
"The ongoing government shutdown has robbed the Fed of several reports monitoring jobs, inflation, and other economic indicators, making the task more complicated, the Journal's report noted. Depending on how long the shutdown continues, the lack of data may make further rate cuts less likely. Still, the confirmation of a rate cut gave the markets a modest boost, CNN reported with the Dow Jones up 0.25%, the S&P 500 up 0.15%, and Nasdaq up 0.5%."
The Federal Reserve reduced its benchmark short-term interest rate by a quarter-point to a range of 3.75%–4%, the lowest level in three years and down from a peak near 5.4%. The policy move passed by a 10-2 vote, with two officials dissenting: one preferring no change and another preferring a half-point cut. The cut aims to counter weakening hiring and recent corporate layoffs while inflation remains near 3%, above the Fed’s 2% target. A government shutdown has limited economic data availability, complicating future decisions and potentially reducing the likelihood of additional cuts. Markets responded with modest gains and slight Treasury yield moves.
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