Federal Reserve Chair Jerome Powell rallied a deeply divided committee of policymakers behind an interest rate-cut, tuning out heavy political pressure to find middle ground among officials variously worried by a faltering labor market and lingering inflation concerns.
The quarter-point reduction — the first cut of the year — came after a significant slowdown in job growth and an unprecedented push by the White House for much lower rates. But with the effects of tariffs on inflation still uncertain, Powell made clear that Fed officials will face difficult trade-offs in the coming months as they consider whether to keep cutting.
"It’s challenging to know what to do,” Powell said Wednesday after officials voted 11-1 to lower borrowing costs. "There are no risk-free paths now.”
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