The Fed cut the benchmark lending rate by 25 basis points, to a range between 4.0 percent and 4.25 percent, while penciling in two more cuts this year.
He added that the Fed was “right to wait and see how tariffs and inflation and the labor market evolved” before lowering rates for the first time in nine months.
The other 11 voting members of the rate-setting Federal Open Market Committee (FOMC) supported the quarter-point cut.
“They want to be clear that they’re not influenced by political considerations, and I think they understand that lots of dissent in multiple directions sends a confusing message to markets,“ he told AFP.
Fed projections, however, reveal a “stark divide” on the need for additional cuts this year, said economist Michael Pearce of Oxford Economics.
Pearce said such a divide is “unusual,“ and expects the October rate decision could again depend on jobs data.
Policymakers walk a tightrope balancing inflation and labor market risks as they mull changes to interest rates.
It noted that job gains have slowed while the unemployment rate -- despite being low -- also inched up.
But Powell said the passthrough of tariffs to consumers has been slower and smaller than expected.
The Fed lifted its 2025 growth forecast to 1.6 percent from June's 1.4 percent projection, while making no change to unemployment and inflation forecasts.
Beyond economic concerns, the Fed faces intensified pressure from Trump this year -- with the president repeatedly criticizing Powell and calling for major rate cuts.
Miran's confirmation -- without resigning from the White House Council of Economic Advisers -- risks giving a sense of political influence over Fed decisions, EY chief economist Gregory Daco earlier told AFP.
Separately, the legal battle by Cook -- the first Black woman on the Fed's board of governors -- could have broader implications for the bank.
But the Trump administration plans to appeal -- potentially bringing the case to the Supreme Court.
This could mean higher inflation, lower growth and more financial market volatility - AFP
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