The Federal Reserve signaled greater doubt over how much it would continue to cut rates after agreeing to a reduction on Wednesday that Chair Jerome Powell conceded had been a close call.

The latest cut, approved by 11 of 12 Fed voters, will lower the Fed’s benchmark federal-funds rate to a range between 4.25% and 4.5%, a two-year low.

The stock market plunged on Wednesday after the Federal Reserve scaled back its expectations for interest rate cuts next year.

The Dow Jones Industrial Average fell about 1,100 points, or 2.5%, the largest drop for the index since August. The dip marked the 10th consecutive day of losses for the Dow, its longest losing streak since 1974.

The Federal Reserve on Wednesday announced its third straight interest rate cut, lowering the benchmark rate by 25 basis points amid economic data showing that inflation remains above the central bank's target rate.

Inside the halls of the Federal Reserve’s headquarters overlooking Constitution Avenue in Washington D.C., casual mentions of the incoming Trump administration are cautious and infrequent. That’s by design.

Republican presidential candidate Donald Trump said that he would allow Federal Reserve Chair Jerome Powell to finish his term at the helm of the central bank if he wins the November election. 

"I would let him serve it out, especially if I thought he was doing the right thing," Trump said, according to a Bloomberg News interview that took place in June.

Powell's term as chair ends in May 2026, while his position on the Fed board continues until 2028.

WASHINGTON, July 9 (Reuters) - The U.S. is "no longer an overheated economy" with a job market that has "cooled considerably" from its pandemic-era extremes and in many ways is back where it was before the health crisis, Fed Chair Jerome Powell said in remarks to Congress that suggested the case for interest rate cuts is becoming stronger.

Every first Friday of this year (here, here and here) we have spent hours deconstructing the glaring propaganda peddled by Biden's Labor Department, meant to show just one thing - how "strong" the economy is under the current administration - and exposing just how ugly the underlying labor data truly is.

Do you believe the U.S. added 272,000 jobs last month? If not, you have plenty of company. The figure is so out of scale, and so at odds with other indicators of the employment picture, that it almost surely is wrong, and likely to be revised sharply lower. 

Is the almighty American jobs market weaker than it looks?

Ever since the pandemic began to fade, surging employment has helped the US economy stand out from its peers. New data on Friday confirmed that trend by showing companies added about 272,000 staff members in May, far ahead of the 180,000 that economists had expected. The bumper reading forced traders to recalibrate (again) on when they expect the Federal Reserve may lower interest rates.

Yet underneath the hood, there are signs that conditions are changing.