US Fed lowers interest rate by 25 basis points in third cut this year

The US Federal Reserve on Wednesday local time decided to lower the target range for the federal funds rate by 25 basis points to 3.5-3.75 percent, marking its third rate cut this year. 

At a press conference, Fed Chair Jerome Powell said, "I would note that having reduced our policy rate by 75 basis points since September and 175 basis points since last September, the fed funds rate is now within a broad range of estimates of its neutral value, and we are well positioned to wait to see how the economy evolves."

Mentioning that the US's tariff policies have led to excessive inflation, Powell added this year's cuts are meant at stabilizing the labor market and steering inflation toward the 2 percent target after the tariff impact subsides.

US President Donald Trump, however, said the Federal Reserve's latest cut could have been "at least doubled." He has long urged the central bank to slash rates to spur further economic growth, calling Powell "a stiff" who approved a "rather small" cut.

Noting that "uncertainty about the economic outlook remains elevated" in its latest press release, the Fed is expected to maintain a cautionary stance despite the rate cut. 

With the next chair of the Federal Reserve to be nominated within the coming weeks, economist Kevin Hassett has been identified as the front-runner, according to comprehensive reports from media outlets including The Wall Street Journal and Reuters. In public remarks, Hassett has stated that there is still "plenty of room" for further rate cuts. While he has emphasized that he would not bow to political pressure, the clear overlap between his stated policy stance and Trump's expectations positions him as the most probable candidate. 

(Cover via VCG)