Federal Reserve Chairman Jerome Powell | Mark Wilson/Getty Images Finance & Tax Divided Fed cuts rates a notch, drawing Trump rebuke

A divided Federal Reserve lowered interest rates a quarter point on Wednesday but didn’t clearly signal that another cut was in store, immediately drawing a sharp denunciation from President Donald Trump.

Fed officials did not forecast another rate reduction this year, though they didn't rule out that option completely. That prompted Trump — who has called on the central bank to slash rates to zero or below — to blast the Fed and its chairman, Jerome Powell.


"Jay Powell and the Federal Reserve Fail Again. No 'guts,' no sense, no vision! A terrible communicator!" Trump tweeted within minutes of the Fed's move.

In a press conference afterward, Powell studiously avoided giving any clear signal about whether and when another rate decrease would be coming, given uncertainty about the global outlook. “We’re going to be highly data-dependent,” he said.

The Fed’s move on Wednesday to cut rates is intended to reassure markets, companies and households amid signs that growth is slowing from its 2018 pace, though the central bank continues to expect the economy to expand over the next few years.

Fed officials nudged up their forecast of economic growth this year, projecting GDP will increase by 2.2 percent, up from a 2.1 percent estimate in June. Over the next couple of years, the Fed expects growth to drop below 2 percent, but officials stayed well away from forecasting a recession.

As the economic picture grows increasingly complex, Powell is having a tougher time achieving consensus within the central bank’s rate-setting committee. Three members dissented from the decision to lower rates, which follows on another cut in July; Kansas City Fed President Esther George and Boston Fed President Eric Rosengren preferred to hold rates steady, while St. Louis Fed President Jim Bullard wanted a deeper cut.

Following the Fed’s quarter-point cut, its main borrowing rate is set between 1.75 and 2 percent.

Of the Fed’s 17 top officials, including seven who don’t have a vote this year, nearly a third didn’t see a need for Wednesday’s cut, according to a chart of officials’ best projections of the appropriate path for rates. But seven saw room for still another rate cut this year.

At his press conference, Powell also dismissed Trump’s suggestion last week that the central bank cut rates below zero, a policy deployed for years in Europe and Japan with unclear results. “I do not think we’d be looking at using negative rates,” he said.