Despite criticism from a number of important Fed officials who think the central bank should be focusing on the rising cost of living instead, the Federal Reserve cut interest rates once more on Wednesday in an attempt to maintain the labor market.
For the third time in a row, most legislators agreed to drop the benchmark lending rate by a quarter point, bringing it down to the lowest level in almost three years—between 3.5% and 3.75%.
Fed Governor Stephen Miran, Kansas City Fed President Jeffrey Schmid, and Chicago Fed President Austan Goolsbee all dissented from the decision on Wednesday, the most since September 2019.
Fed policymakers included only one rate drop for the upcoming year in their most recent economic predictions, which remained consistent with their September estimate. They will “carefully assess” the “extent and timing” of any further cutbacks, according to their most recent policy statement, which implies they are leaning toward keeping on hold in the near future.
The rate reductions this year were a reaction to growing indications of a faltering labor market, such as very sluggish job creation and increased unemployment among minorities and young people.
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