In line with broad expectations, the Fed lowered its key overnight borrowing rate by one-quarter of a percentage point, putting rates between 3.5 and 3.75 percent.
WASHINGTON, Dec. 11 (Xinhua) -- The U.S. Federal Reserve (Fed) on Wednesday lowered the basic interest rate as markets expected, leaving whether to cut more times in 2026 uncertain.
In line with broad expectations, the Fed lowered its key overnight borrowing rate by one-quarter of a percentage point, putting rates between 3.5 and 3.75 percent.
The Fed's decision came as the central bank board is divided over interest rates, with three members voting "no," a scenario not seen for roughly six years.
The 9-3 vote followed dissents from the Fed's "hawks" and "doves." While "hawks" favor higher interest rates, in a bid to lower inflation, "doves" call for lower rates, in an effort to support the labor market.
After Wednesday's rate cut, the Fed signaled it will proceed with caution over further reductions.
"In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee (Federal Open Market Committee, FOMC) will carefully assess incoming data, the evolving outlook, and the balance of risks," the Fed said in a statement.
In an interview before the Fed's announcement, Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua the Fed will "put out a very skeptical statement on further cuts."
In an article published by his organization's website on Tuesday, Dean Baker, co-founder of the Center for Economic and Policy Research, wrote that a rate cut at this week's meeting "should be a no-brainer."
"The September jobs report showed the unemployment rate had risen to 4.4 percent. That is still low by historical standards, but it's a full percentage point above the low hit in 2023. It's also 0.5 percentage points above the average for the years 2018-2019," Baker wrote.
"The unemployment rate for young workers between the ages of 20-24 was 9.2 percent in September. That was the highest rate since May of 2021. It is 3.7 percentage points above the low hit in April of 2023," he wrote.
U.S. President Donald Trump has repeatedly expressed his dislike for Fed Chair Jerome Powell, at times hurling personal insults at the central bank chief.
On Wednesday, Trump slashed the quarter-point rate cut, saying it could have been "at least doubled."
Trump, who has long urged the Fed to cut rates to promote growth, called the cut "rather small" and Powell a "stiff."
Powell is due to finish his term in mid-2026. As such, U.S. media, experts and observers surmise that Trump will choose a loyalist to chair the Fed.
Brookings Institution Senior Fellow Darrell West told Xinhua: "For top positions, Trump loves to choose individuals who are loyal to him. He wants individuals who understand his position and execute his agenda."
"He is not likely to pick an independent-minded person for such an important post as the Federal Reserve Bank," West said.
Christopher Galdieri, a political science professor at Saint Anselm College in the northeastern state of New Hampshire, told Xinhua: "Trump will want someone who will take direction from Trump over anything else."
Some others take a different view.
Clay Ramsay, a researcher from the Center for International and Security Studies at the University of Maryland, said: "The Fed is complicated to manipulate -- far more so than a cabinet department."■
