Fed cuts rates but falls short of Trump’s call; Miran backs deeper reduction

WASHINGTON, Sept. 17 (Reuters) – The Federal Reserve lowered its benchmark interest rate by a quarter percentage point on Wednesday, to a range of 4.00% to 4.25%, marking its first cut since December. The move comes in response to signs of labor market weakness but remains below the sharper cuts President Donald Trump has urged to stimulate the economy.

Trump has consistently pushed for more aggressive reductions to ease borrowing costs for families and businesses, boost growth, and prevent unemployment from climbing further. His ally on the Fed, newly sworn-in Governor Stephen Miran, was the lone dissenter, voting for a larger half-point cut and projecting additional reductions that could push rates below 3%.

Fed Chair Jerome Powell acknowledged at a press conference that labor market weakness is now the top concern but reiterated that inflation remains above target. “There are no risk-free paths. We have to keep our eye on inflation, but we cannot ignore maximum employment,” Powell said.

Despite internal resistance, Trump’s pressure has shaped the debate within the central bank. Two of his appointees – Michelle Bowman and Christopher Waller – who had opposed cuts earlier, now aligned with the majority in supporting the rate reduction.

Economists note that Trump’s emphasis on jobs and growth reflects real concerns: job creation is running below the pace needed to keep unemployment steady, with young people and minorities hit hardest.

Markets reacted cautiously after the decision, with the dollar edging higher and futures already pricing in strong odds of another cut in October – a sign that the approach championed by Trump and Miran may gain more traction in upcoming meetings.