Divided US Fed makes third straight rate cut, signals higher bar ahead

The U.S. Federal Reserve has cut interest rates for the third time in a row, lowering its benchmark rate by about 25 basis points to around 3.5 %–3.75 % — the lowest level in nearly three years. This decision shows that the central bank is worried about slowing economic growth and a weakening labor market, even though inflation remains above its 2% target. However, there is significant disagreement within the Fed: some policymakers wanted no change, others wanted a bigger cut, highlighting internal divisions about how to balance inflation and support the economy. Despite the rate cut, the Fed signalled that future reductions may be limited and that it might hold rates steady for a while, raising the bar for further monetary easing. Markets reacted positively with stocks and bond yields moving in favour of the cut, but uncertainty remains about the next steps