Divided Fed cuts interest rates, amid job market concerns

The Federal Reserve cut interest rates for the third time this year, pointing to a job market that Chairman Jerome Powell said may be weaker than it appears.

The Federal Reserve on Wednesday cut its influential interest rate for the third time this year, pointing to a job market that Chairman Jerome Powell said may be weaker than it appears.

The cut of a quarter point — a cautious interest rate move by the Fed — could make it cheaper for average Americans who hold a mortgage, have credit card debt or need to take out or refinance a personal loan. It would also help businesses borrow at lower rates.

But it comes at the risk of stoking inflation that has yet to fall to the Fed’s preferred levels. At a news conference following the Fed’s announcement, Powell said that tariffs were helping to keep inflation higher than it might be otherwise.

Given the Fed’s dual mandate of promoting maximum employment while keeping prices stable, any move the central bank makes comes with risks.

“There is no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said. “Our obligation is to make sure that a one-time increase in the price level does not become an ongoing inflation problem.”