*´ºÉ«Ö±²¥

Yet the central bank’s focus has shifted quickly from inflation, which remains modestly above its 2% target, to jobs, as hiring has grounded in recent months and the unemployment rate has ticked higher. Lower interest rates could reduce borrowing costs for mortgages, car loans, and business loans, and boost growth and hiring.

“In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen,� Powell said at a press conference following the Fed's two-day meeting.

Fed officials also signaled that they expect to reduce their key rate twice more this year, but just once in 2026. Before the meeting, investors on Wall Street had projected five cuts for the rest of this year and next. Stocks wavered a bit as Powell took questions from reporters. The S&P 500 was down 0.1% as of 3:10 p.m. ET.

Just one Fed policymaker dissented from the decision: Stephen Miran, who President Donald Trump appointed and was confirmed by the Senate in a rushed vote late Monday just hours before the meeting began. Miran preferred a larger half-point cut, but Powell told reporters there wasn't “very much support� for the bigger-size cut among Fed officials.

Many economists had forecast there would be additional dissents, and the meeting's outcome suggests that Powell was able to patch together a show of unity from a committee that includes Miran and two other Trump appointees from his first term, as well as a Fed governor, Lisa Cook, whom Trump is .

The Fed is facing both a challenging economic environment and threats to its traditional independence from day-to-day politics. At the same time that hiring has weakened, inflation remains stubbornly elevated. It rose from a year ago, according to the consumer price index, up from 2.7% in July and noticeably above the Fed’s 2% target.

It’s unusual to have weaker hiring and elevated inflation, because typically a slowing economy causes consumers to pull back on spending, cooling price hikes. Powell suggested last month that sluggish growth could keep inflation in check even if tariffs lift prices further.

Separately, Trump’s attempted firing of Cook is the first time a president has tried to remove a Fed governor in the central bank’s 112-year history, and has been seen by many legal scholars as an on the Fed’s . His administration has accused Cook of mortgage fraud, but the accusation has come in the context of Trump’s extensive criticism of Powell and the Fed for not cutting rates much faster and steeper.

An appeals court late Monday that the firing violated Cook’s due process rights. A lower court had also previously ruled that Trump did not provide sufficient justification to remove Cook. Also late Monday, the Miran’s nomination, and he was quickly sworn in Tuesday morning.

On Tuesday, Trump said Fed officials “have to make their own choice� on rates but added that “they should listen to smart people like me.� Trump has said the Fed should reduce rates by three full percentage points.

When asked what the signs would be that the Fed is no longer functioning independent of political pressure, Powell said, “I don’t believe we’ll ever get to that place. We’re doing our work exactly as we always have now.�

In their projections for the economy and monetary policy, most Fed officials forecast the central bank's key rate in a range of 3.5% to 3.75% by year end. Miran, however, forecast a rate of 2.75% to 3.0%.

The Fed’s move to cut rates puts it in a different spot from many other central banks overseas. Last week, the European Central Bank left its benchmark rate , as inflation has largely cooled and the economy has seen limited damage, so far, from U.S. tariffs. On Friday, the Bank of England is also expected to keep its rate on hold as inflation, at 3.8%, remains higher than in the United States.