We knew they had it in ’em.
On Wednesday, the Federal Reserve cut rates for the first time since December, as an increasingly thorny economic picture emerges.
The central bank reduced the federal funds rate to a range of 4% to 4.25%, down from 4.25% to 4.5%.
Though the decision was widely expected, it wasn’t unanimous. There was one dissenting vote from Federal Reserve Governor Stephen Miran, an economic adviser to President Trump who was confirmed by the Senate just hours before the Fed’s latest policy meeting started. Miran advocated for a half-point cut.
In addition to Wednesday’s cut, the Fed signaled that two more rate cuts could come later this year, with only one currently estimated for 2026.
The horns of a dilemma. The central bank is currently tasked with attempting to thread the needle on a complex economic landscape, somehow bringing down elevated inflation amid a weakening job market.
In its post-meeting statement, the Fed acknowledged the difficulty of the current moment, noting “recent indicators suggest that growth of economic activity moderated in the first half of the year.”
“Uncertainty about the economic outlook remains elevated,” the Fed wrote. “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen.”
Zoom out. Trump has repeatedly heckled Fed Chair Jerome Powell for not cutting rates at a fast enough clip, despite the central bank’s historic independence from the White House. Powell, for his part, has stressed that Trump’s remarks aren’t impacting the Fed’s decision-making process.
Trump is attempting to exert power at the central bank, though: In August, the president tried to fire Fed Governor Lisa Cook over mortgage fraud allegations, in the first removal effort of its kind.
Loan records recently reviewed by the New York Times have called those allegations into question. Cook has denied committing fraud. On Monday night, a federal appeals court upheld a lower-court ruling that Cook can keep her job for now, a decision that allowed her to participate in Wednesday’s Fed meeting.
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