Divided Fed lowers rates, signals pause and one 2026 cut as growth rebounds

WASHINGTON — The Federal Reserve cut interest rates on Wednesday in another divided vote, but signaled it will likely pause further reductions in borrowing costs as the U.S. central bank looks for clearer signals about the direction of the job market and inflation that “remains somewhat elevated.” New projections issued after the Fed’s two-day meeting showed the median policymaker sees just one quarter-percentage-point cut in 2026, the same outlook as in September, with inflation expected to slow to around 2.4% by the end of next year even as economic growth accelerates to an above-trend 2.3% and the unemployment rate remains at a moderate 4.4%. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully asses