Powell Pushes New Rate Cut As Inflation Rises, Hiring Slows

The Federal Reserve cut its benchmark interest rate by a quarter point on Wednesday, marking the third reduction this year as policymakers try to revive a flagging labor market.

The rate now sits between 3.5% and 3.75%, well below its 2023 peak but still far from the near-zero levels of the pandemic era.

Divisions within the US Federal Reserve over Wednesday’s decision to lower interest rates signal how the new chair may struggle to marshal consensus after Jerome Powell leaves the role: Here is your Evening Briefing. https://t.co/xfasGBUUBQ

— Bloomberg (@business) December 11, 2025

Fed Chair Jerome Powell said the move aims to support hiring while acknowledging the central bank faces a difficult balancing act.

Inflation has risen in recent months even as job growth slows, raising fears of an early stage of stagflation.

▫ Fed Cuts Interest Rates By A Quarter Point Amid Apparent Split Over US Economy

▫Divisive vote to lower rates highlights uncertainty in the Fed as economy absorbs major shakeups, including tariffs
▫@LaurenAratani
▫https://t.co/LU3xDrUt1O#GuardianUS #digital… pic.twitter.com/iXnvZEPuk0

— 𝙵𝚛𝚘𝚗𝚝 𝙿𝚊𝚐𝚎𝚜 𝚃𝚘𝚍𝚊𝚢 📰 (@ukpapers) December 11, 2025

Powell warned there is “no risk-free path” as the Fed tries to meet its dual mandate of stable prices and maximum employment.

The decision exposed rare public divisions inside the Fed. Three members of the Federal Open Market Committee dissented — the most since 2019 — underscoring the uncertainty surrounding further rate cuts.

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