The Federal Reserve lowered interest rates by a quarter of a percentage point on Wednesday as officials signaled that two more cuts could follow this year in light of rising risks confronting the labor market.
The decision to lower borrowing costs for the first time since December shifts interest rates to a range of 4 percent to 4.25 percent. The decision was not unanimously supported, the second straight meeting that featured at least one dissent from a member of the Board of Governors.
Stephen Miran, President Trump’s pick to join the Fed who was sworn in just minutes before the start of the central bank’s two-day meeting on Tuesday, voted in favor of a half-point reduction.
The decision to cut marks a turning point for the central bank, whose officials have been locked in an intense debate about the right time to provide some relief to borrowers when its goals of low, stable inflation and a healthy labor market are in tension with one another.
Inflation picked back up over the summer and appears poised to continue accelerating this year as a result of Mr. Trump’s tariffs. The labor market, while still solid, has started to flash more ominous signs.
Jobs growth has sharply slowed, with monthly gains averaging just 29,000 over the three-month period ended in August. In May, the average stood around 130,000 positions. While consumers are still spending and the unemployment rate remains stable at 4.3 percent, sluggish hiring has raised concerns that the labor market is now much more vulnerable than earlier in the year.
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