Federal Reserve trims US borrowing prices – however indicators a pause in additional reductions

The US Federal Reserve last night cut interest rates but signalled a pause in further reductions.

It lowered borrowing costs as rate-setters put concerns over jobs and economic growth ahead of worries about high inflation.

The central bank cut rates by 0.25 percentage points to a range of between 3.5 per cent and 3.75 per cent, as widely expected by markets.

But projections issued alongside the decision suggested rate-setters see just one quarter-point cut in 2026. 

And language in its statement about assessing incoming data before any further move was seen as signalling a pause.

The statement added: ‘Available indicators suggest that economic activity has been expanding at a moderate pace.

Borrowing boost: The US Federal Reserve cut rates by 0.25 percentage points to a range of between 3.5% and 3.75%, as widely expected by markets

‘Job gains have slowed this year and the unemployment rate has edged up through September.’

It comes as the Fed remains under intense pressure, with chairman Jerome Powell heavily criticised by Donald Trump for not going further and faster with rate cuts. 

Last night six rate-setters voted for a quarter-point cut, two for no change and one – Trump ally Stephen Miran – for a half-point reduction.