Fed cuts rate but signals restraint

Central bank says it may hold steady in the coming months, possibly irking Trump.

- BY CHRISTOPHER RUGABER

MICHAEL NAGLE Bloomberg TV SCREENS at the NYSE show Fed Chair Jerome H. Powell speaking after policymakers delivered a third consecutive interest rate cut.

The Federal Reserve reduced its key interest rate for the third time in a row Wednesday but signaled that it may leave rates unchanged in the coming months, a move that could attract ire from President Trump, who has demanded steep reductions to borrowing costs.

In a statement released after a two-day meeting, the Fed's rate-setting committee signaled that it may keep its rate unchanged in the coming months. And in a set of quarterly economic projections, Fed officials signaled they expect to lower rates just once next year.

Wednesday's cut reduced the rate by a quarter-point to about 3.6%, the lowest it has been in nearly three years. Lower rates from the Fed can bring down borrowing costs for mortgages, auto loans and credit cards over time, though market forces can also affect those rates.

Three Fed officials dissented from the move, the most in six years and a sign of deep divisions on a committee that traditionally works by consensus. Two officials voted to keep the Fed's rate unchanged, while Stephen Miran, whom Trump appointed in September, voted for a half-point cut.

December's meeting could usher in a more contentious period for the Fed.