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The Federal Reserve lowered its benchmark interest rate by a quarter percentage point Wednesday, in an effort to support a weakening job market. But stubborn inflation and delayed economic data complicated the  decision, leading to more-than-usual disagreement within the rate-setting committee.  

The rate cut should make it slightly cheaper to borrow money to buy a car, expand a business or carry a balance on a credit card. As with the two previous rate cuts, the decision was not unanimous, highlighting the competing pressures that the central bank is facing. 

Inflation is still well above the Fed's target, which would ordinarily call for keeping interest rates elevated. But unemployment has also been creeping up, which typically points toward lower rates. Fed policymakers were divided on which of those problems is more urgent. 

Nine members of the rate-setting committee voted for the quarter-point cut.  Two regional Fed bank presidents dissented, saying they wanted to hold rates steady, while Fed governor Stephen Miran voted for a supersized, half-point cut. 

It was the first time in six years that an interest rate vote was so divided.   

The decision was also clouded by a lack of timely data as a result of the six-week government shutdown. Furloughed federal workers were unable to measure inflation and unemployment in October. And November's readings have been delayed until next week — too late to sway the Fed's decision.  

Policymakers had to rely on somewhat stale economic data from September, when annual inflation was clocked at 2.8%, according to the Fed's preferred measure, while unemployment stood at 4.4%. Both figures were slightly higher than in the previous month.  

Policymakers offered updated predictions about where they think interest rates are going next year.  On average, members of the rate-setting committee expect just a single quarter-point cut in 2026 — similar to what they were forecasting in September. 

President Trump has been demanding that the central bank cut rates more aggressively, even though the Fed is designed to be insulated from political pressure. In September, Trump installed Miran, a 

 to fill a short-term vacancy on the Fed board. Since then, Miran has voted consistently for larger rate cuts than his Fed colleagues. 

Trump has also tried to replace Fed Governor Lisa Cook over unproven allegations of mortgage fraud. So far, that effort has been 

. The high court will hear arguments in Cook's case next month.

, saying Powell has been "too late" in cutting interest rates.  Powell's term as Fed chair expires in May, and Trump is expected to nominate a new leader for the central bank soon.

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Scott Horsley

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The Fed lowered its benchmark interest rate by a quarter percentage point, in an effort to shore up a weakening job market. With inflation remaining stubbornly high, it was not a slam dunk decision.  

A divided Federal Reserve cuts interest rates for a 3rd straight time

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