• The Federal Open Market Committee (FOMC) lowered the federal funds rate target by 0.25 percentage points to a range of 4-4.25%.
  • Chair Jerome Powell stated that "almost everyone" on the committee supported the cut, with one member dissenting in favor of a larger reduction.
  • The move is intended to mitigate rising downside risks to the labor market while the Fed continues to grapple with somewhat elevated inflation.

In a decisive move aimed at shoring up a moderating economy, the Federal Reserve cut interest rates on Wednesday, a decision Chair Jerome Powell said was backed by an overwhelming majority of the central bank’s policy-setting committee.

“Almost everyone wrote down support of this cut,” Powell said in remarks following the two-day meeting, underscoring the broad consensus for action. The lone dissenter, Stephen I. Miran, preferred a more aggressive 0.5 percentage point cut, according to people familiar with the matter.

The quarter-point reduction brings the benchmark federal funds rate to a new target range of 4% to 4.25%. The decision reflects a delicate balancing act for the Fed, which is responding to increased risks to employment even as inflation remains stubbornly above its 2% long-run target. Recent data shows economic activity growth has moderated through the first half of the year and job gains have slowed, though the unemployment rate remains low.

Powell emphasized that the committee’s approach remains data-dependent and highly flexible. The policy adjustment is widely seen as an “insurance cut” designed to buffer the economy against further softening without abandoning the ongoing commitment to price stability. The FOMC statement noted that the implications for the future path of policy will depend heavily on incoming information.

Market participants are now parsing every word for signals on whether this is the start of an easing cycle or a one-off adjustment. Attempts to reach Miran for comment on his dissenting vote were not immediately successful. The Fed’s next steps will be closely tied to upcoming employment and inflation reports, with analysts divided on the likelihood of further cuts this year.