The Federal Reserve cut its benchmark interest rate by a quarter point for the third time since September, bringing it to about 3.6%, the lowest in nearly three years.

The Federal Reserve has cut interest rates to a three-year low after a divisive meeting that exposed deep fractures in the central bank over whether to prioritise tackling a weakening jobs market or high inflation.

The reduction lowers the federal funds rate — what banks charge each other for short-term loans — to between 3.5% and 3.75%, down from its prior range of 3.75% to 4%. The Fed's decision marks the third consecutive rate cut since September, lowering the federal funds rate by a total of 0.75 percentage points this year.

The Fed lowered its benchmark interest rate by a quarter percentage point, in an effort to shore up a weakening job market. With inflation remaining stubbornly high, it was not a slam dunk decision.

The central bank lowered the benchmark federal funds rate by a quarter point for the third time in a row to a range of 3.5 per cent to 3.75 per cent, matching Wall Street forecasts.

The presidents of the 12 regional Federal Reserve banks across the country wield nearly as much influence over interest rates as permanent Fed governors.

The Federal Reserve unanimously reappointed all regional Reserve Bank presidents on Thursday to new five-year terms beginning March 1, 2026.

The U.S. stock market is having a terrific year. The benchmark S&P 500 ( ^GSPC +0.67%) is up 16% in 2025 despite economic uncertainty created by President Trump's tariffs. But there could be trouble on the horizon.