The Federal Reserve lowered its benchmark interest rate for the second time this year, reducing it by a quarter point to about 3.9 percent. The move aims to support economic growth and hiring as inflation remains above the central bank’s 2 percent target.
Federal Reserve Chair Jerome Powell said the decision reflects a careful balance between slowing job growth and persistent inflation but warned that future rate cuts are not certain. He noted significant disagreement among Fed policymakers and said upcoming economic data will guide December’s decision.
Powell also acknowledged that the ongoing federal government shutdown has limited access to key economic reports, including employment and inflation data, which could prompt a more cautious approach in the coming months.
While the rate cut could gradually lower borrowing costs for mortgages, auto loans, and business credit, Powell emphasized that inflation pressures are easing in some sectors, such as housing and services. The Fed will also halt the reduction of its securities holdings in December, a step expected to slightly ease long-term interest rates.
Financial markets responded cautiously, with major indexes ending mixed following Powell’s comments on the uncertain path ahead for monetary policy.
