Fed’s Rate Cut Sparks Rare Dissent and Lifts Stock Market
The Federal Reserve reduced its key interest rate by 25 basis points on Wednesday. The decision faced unusual opposition, with three officials breaking ranks—the highest number of dissenters since September 2019. The stock market responded positively, pushing U.S. stocks higher after the announcement.
The split within the Federal Open Market Committee (FOMC) became clear as three members voted against the quarter-point cut. Stephen Miran argued for a deeper 50 basis points reduction, while Austan Goolsbee and Jeffrey Schmid favoured leaving rates unchanged. Their disagreement mirrored broader divisions over how to handle inflation risks and signs of economic cooling.
The Fed’s latest rate cut marks another moment of internal division over monetary strategy. With three officials dissenting, the decision underscores the challenges of balancing inflation control and growth. The stock market welcomed the move with a rise in stock prices.
