A divided Fed is set to lower interest rates again, in one of its toughest calls

Federal Reserve Chair Jerome Powell at a press conference on October 29 in Washington, DC. Samuel Corum/Sipa USA/AP Washington —

The Federal Reserve on Wednesday is set to lower borrowing costs again, even as stark divisions persist within the central bank’s powerful rate-setting committee.

Wednesday’s decision will likely emerge as the Fed’s toughest call since at least September 2024, when officials debated the size of that month’s rate cut.

Fed officials are in disagreement over which side of their dual mandate to prioritize: full employment or stable prices. Job growth this year has been unusually weak and several officials have said the situation could get worse if they don’t continue to lower rates. Other officials, however, say the greater risk is that inflation stays stu