A reading of the American interest… The Fed’s division deepens the uncertainty in 2026

The Federal Reserve (the US central bank) cut interest rates for the third time this year, but internal divisions created uncertainty about the path The American economy and its repercussions on global economies in the coming months.

The central bank announced yesterday, Wednesday, that it would reduce the key lending rate by a quarter of a percentage point (25 basis points), putting it in a range between 3.50% and 3.75% – its lowest level in 3 years.

Although the interest cut was expected before its official announcement, monetary policy makers disagreed on how to balance two conflicting priorities: The weakness of the labor market on the one hand, and the rise in prices on the other hand, while expectations indicate that the interest rate will be reduced once next year, with the possibility of changing this with the emergence of new data.

What does Powell say?

Federal Reserve Chairman, Jerome Powell, said that the central bank needs sufficient time to know the impact of the three interest rate cuts approved by the council this year on the American economy, adding that policymakers will carefully study the incoming data before their next meeting in January 2026.

Powell told reporters: "We are in a position to wait and see how the economy develops, indicating that the Federal Reserve is facing "An extremely difficult situation" In light of facing the risks of high inflation and unemployment, so that "He cannot do two things at once"

The picture is expected to become clearer for central bank governors next week, with the release of official data expected on the labor market and inflation for November.

This new data may change the expectations of policymakers, which may strengthen calls for more monetary easing next year if new indicators of a slowdown in the labor market emerge.

Disagreements and discrepancies

The decision to cut interest rates on Wednesday was not issued unanimously, which indicates a widening gap of disagreement between the Board of Governors of The central bank on the outlook for the US economy.

Three Federal Reserve officials expressed the prevailing view and officially expressed their opposition to a quarter-point rate cut.

Stephen Meeran, Trump’s economic advisor, voted in favor of a larger cut of half a percentage point (50 basis points).

On the other hand, Austin Goolsbee, President of the Federal Reserve Bank of Chicago, and Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, voted to maintain On fixed interest rates.

When asked about the differences between officials, Powell acknowledged that there are "Constant tension" Between the Fed’s two missions of maintaining price stability and low unemployment is… "Unusual"

Trump demands the lowest interest rates in the world

US President Trump, who has urged Powell on several occasions to lower interest rates, received the interest announcement coolly, saying that "Federal" It could have lowered interest rates "At least twice as much"i.e. 50 basis points.

He added during a round table meeting at the White House: "Our interest rates should be much lower. We should have the lowest interest rates in the world".

Who will succeed Powell

President Trump is seeking to search for a successor to Powell as head of the Federal Reserve, after his term ends next May, amid uncertainty about the future course of the council’s monetary policy, and Trump may announce his choice within the next few weeks.

Kevin Hassett, the veteran conservative economist and Trump’s main economic advisor, is considered the most likely candidate to succeed Powell. Hassett is known to be loyal to Trump, and he served as Chairman of the Council of Economic Advisers in the White House during Trump’s first term, and currently chairs the National Economic Council.

For a long time, Hassett has staunchly defended Trump’s economic policies, downplaying data showing signs of weakness in the US economy, insisting on allegations of bias in the Bureau of Labor Statistics, and supporting Trump’s management of the Federal Reserve.

This loyalty that Hassett pledges to the president has raised questions from analysts about what If he will act independently.

Other names that have been floated to head the Federal Reserve include economist Kevin Warsh, current Federal Reserve Governor Christopher Waller, and Treasury Secretary Scott Besent.

• For more: Follow Khaleejion 24 Arabic, Khaleejion 24 English, Khaleejion 24 Live, and for social media follow us on Facebook and Twitter