Powell faces a divided Fed over next rate cut decision

Federal Reserve Chair Jerome Powell is preparing to navigate a divided Federal Open Market Committee as he considers whether to push through another rate cut at December’s meeting.

The split stems from stagnating job growth and inflation stuck near 3%, above the Fed’s 2% target.

Powell is weighing two options, per the Wall Street Journal.
The first is a “cut then hold” strategy, where the Fed reduces rates in December and uses its post-meeting statement to signal that additional cuts will face a high bar.

Another option is to hold rates steady and reassess the decision in January, once the missing employment and inflation data become available.

Recent comments from key allies suggest leadership still leans toward a cut. 

New York Fed President John Williams said there is “room for a further adjustment in the near term,” while San Francisco Fed President Mary Daly also expressed support for a rate cut.