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The Federal Reserve building in Washington, United States on 16 September 2025.
The US central bank has cut interest rates by a quarter percentage point for the third time this year, with a new range of 3.5% to 3.75%.
The Federal Reserve decision comes as it seeks to support a weakening job market even as inflation persists.
The decision to cut rates should make it slightly cheaper to borrow money to buy a car and pay off credit card debt.
However, as with the two previous rate cuts, it was not a unanimous decision; underscoring how fractured the central bank has become as it grapples with the competing pressures of rising unemployment and sticky inflation.
Inflation is still well above the Fed’s 2% target, which would usually call for keeping higher rates, but unemployment has been creeping up, which typically points toward lower rates.
Fed policymakers are divided over which of those problems is more urgent.
Three of them dissented, marking the first time in six years that an interest rate vote was so divided.
Delayed economic data has also complicated their decision-making.
The government shutdown meant there was no federal measure of inflation and unemployment in October and November’s readings have been delayed until next week.
In his speech after the announcement, Fed Chairperson Jerome Powell repeatedly noted that “very little data on inflation has been released since our meeting in October.”
Fed officials tentatively signalled at least one more rate cut next year, though their projections varied significantly.
-Report by Kate Fisher
