Jerome Powell

The US Federal Reserve has lowered interest rates for the third time this year, even as internal divisions create uncertainty about additional cuts in the coming months. The central bank said on Wednesday it was lowering the target for its key lending rate by 0.25 percentage points, putting it in a range of 3.50% to 3.75% – its lowest level in three years. …The Fed’s economic projections released on Wednesday suggest one rate cut will take place next year, although new data could change this. Fed chair Jerome Powell said central bankers needed time to see how the Fed’s three cuts this year work their way through the US economy. …The Fed is facing a “very challenging situation” as it confronts risks of rising inflation and unemployment, Powell said, adding: “You can’t do two things at once”. The decision to lower rates on Wednesday was not unanimous, suggesting widening divisions over the outlook for the US economy.