The Federal Reserve lowered interest rates by a quarter of a percentage point on Wednesday in what was a highly contentious decision, suggesting officials may be reluctant to lower borrowing costs much further unless the labour market weakens sharply. The decision to cut for a third meeting in a row shifted interest rates to a new range of 3.5-3.75 per cent.

It marked the fourth straight vote that was not backed by all members of the 12-person Federal Open Market Committee, underscoring how fractured the central bank has become as it grapples with the risk of both rising unemployment and sticky inflation.

Stephen I. Miran, a member of the board of governors, opposed the decision in favour of a larger, half-point reduction. It is the third meeting in a row that Miran, who was tapped by President Trump to join the Fed in September, has dissented.

Jeffrey R. Schmid, president of the Federal Reserve Bank of Kansas City, voted instead for the Fed to stand pat, as he did in October. He was joined by Austan D. Goolsbee, president of the Chicago Fed.

That degree of division is rare for Fed chair Jerome Powell, who has previously been able to corral his colleagues to move as a largely cohesive group even while navigating tricky economic terrain.

New York Times News Service