Monetary policy

The Federal Open Market Committee voted to reduce interest rates by 25 basis points Wednesday, but the emergence of dissents on the committee makes the chance of another quarter-point cut in December less certain.

The Federal Reserve's interest rate-setting body is expected to announce a 25 basis point cut and provide guidance on the trajectory of its balance sheet Wednesday afternoon.

The Federal Open Market Committee is expected to announce guidance on the end of its quantitative tightening program later Wednesday. As that process draws to a close, experts are questioning when and how the central bank should use its balance sheet to smooth economic stress in the future.

Federal Reserve Gov. Michael Barr said in a speech Thursday that he fears the gradual pace of price increases from tariffs being passed on to consumers may prolong the one-time inflationary effect of the tariffs to the point where it affects consumers' inflation expectations.

Will the Federal Reserve cut rates in October? BNP Paribas Chief U.S. Economist James Egelhof discusses the meeting and Chair Jerome Powell's press conference.

Federal Reserve Gov. Stephen Miran sidestepped whether policy setting pressure from the administration is a welcomed development, but reiterated that he wants to avoid succumbing to "groupthink."

Legal experts say the Supreme Court's decision not to immediately rule on a request to remove Federal Reserve Gov. Lisa Cook from office suggests that, whatever the court's views on independent agencies may be, it views the central bank differently.

Federal Reserve Vice Chair Philip Jefferson said Friday that the economic outlook is uncertain and that he was adopting a cautious approach to gauging whether slowing growth and a softening labor market outweigh inflation pressures from tariffs.

The Supreme Court said Wednesday that it would defer President Donald Trump's request for a stay until after oral arguments scheduled for January 2026, allowing Federal Reserve Governor Lisa Cook to remain on the board at least until then.

Federal Reserve Vice Chair Philip Jefferson said despite the near term cloudiness to economic projections, he does expect inflation to resume its downward trajectory next year and reach the Fed's 2% inflation target in the coming years.

Federal Reserve Bank of Kansas City President Jeff Schmid said that the central bank should continue its focus on curbing inflation, as the job market is "largely in balance."

Federal Reserve Chair Jerome Powell said in a speech Tuesday that the central bank's policy stance is "modestly restrictive," a stance that will give the central bank flexibility to react to an uncertain economic future.

Federal Reserve Vice Chair for Supervision Michelle Bowman said in a speech Tuesday that steeper interest rate cuts should be on the table if the labor market continues to show signs of decline.

Prior to this week's Federal Open Market Committee meeting, many onlookers thought a Trump-aligned and oppositional voting bloc could emerge, complicating the central bank's message. But the quarterly economic projections show that not to be the case.

Federal Reserve Chair Jerome Powell said there was a "high degree of unity" among committee members during this week's Federal Open Market Committee vote. Out of 12 FOMC members, 11 voted for a 25 basis point cut.

The Federal Open Market Committee's decision to reduce interest rates for the first time in nine months lifted bank stocks Wednesday. The 25-basis-point reduction could lead to net interest income headwinds now, but loan growth later, analysts said.

The Federal Reserve is widely expected to lower interest rates, but questions about how big of a cut and the trajectory for future cuts remain uncertain — and the White House's power struggle with the central bank is a complicating factor.

Market watchers expect the Federal Open Market Committee to announce a 25 basis point rate cut today, but are also watching for signals of more cuts to come and how many members push for a larger 50 basis point cut.

The White House's appeal of a lower court injunction allowing Federal Reserve Gov. Lisa Cook to remain on the Fed board is urging the court to rule in its favor ahead of the Federal Open Market Committee meeting on Sept. 16 and 17.

The White House has appealed a D.C. District Court ruling allowing Federal Reserve Gov. Lisa Cook to remain on the Fed board pending the outcome of her challenge to President Trump's moves to fire her.