The Federal Reserve on Wednesday cut interest rates by a quarter point to the 4% to 4.25% range – delivering highly-anticipated relief to borrowers for the first time since December 2024.
But Stephen Miran – previously Trump’s economic adviser and the newest member of Fed – cast a lone dissenting vote, pushing instead for a jumbo-sized half-point rate cut.
Central bankers have been delaying rate cuts over fears that tariffs could reheat inflation, which did pick up over the summer, and recent economic data have delivered a mixed bag of results.
But in its policy note, the Fed said it was slashing rates “in light of the shift in the balance of risks.”
That’s a nod to Fed Chairman Jerome Powell’s Jackson Hole speech last month, when he signaled that the weakening labor market is now a greater concern than inflation – especially since tariffs might only introduce a one-time price impact.
The Dow Jones Industrial Average soared 414 points, or 0.9%, to a new intraday record.
Now the question is whether Americans can expect a consecutive rate cut at the Fed’s October meeting. In June, officials had predicted two interest rate cuts this year.
Meanwhile, President Trump has ramped up his pressure campaign on the Fed to cut rates for months. The attacks have turned personal, most recently slamming Powell as “incompetent” on Sunday.
Miran was sworn in to the board just minutes before the Fed’s two-day meeting started on Tuesday.
Fed governor Lisa Cook, who the Trump administration has attempted to oust over accusations of mortgage fraud, also voted on Wednesday’s decision.
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