The Federal Reserve cut its target rate by 1/4 point to a 3.50%-to-3.75% range, marking the third reduction this year. Fed Chair Jerome Powell suggested the central bank would remain cautious on whether to cut further. “We’re well positioned to wait and see how the economy evolves,” he said.

The Federal Reserve expects just one interest rate cut in 2026, according to the central bank’s revised outlook. The estimate is based on the Fed’s so-called dot plot, which anonymously shows members’ expectations. The current median estimate of 3.4% for the federal funds rate at the end of 2026 is a quarter point lower than the current range between 3.50%-3.75% but unchanged from the previous projection.

New Federal Reserve economic projections reflect modestly higher growth and lower inflation forecasts. GDP growth in 2026 is expected to increase 2.3%, up from 1.8% in the September estimate. Meanwhile, PCE inflation at the headline level is projected to ease to 2.4% next year from 2.6% in the previous estimate.

President Trump said the US has seized an oil tanker off the coast of Venezuela. The seizure comes amid rising tensions mount between the White House and the government of President Nicolás Maduro.

The Federal Reserve said it will launch a $40 billion short-term bond-buying program. The decision follows a jump last month in overnight lending rates as the Fed’s efforts to shrink its balance sheet absorbed excess liquidity from markets.

Federal Reserve Chair Powell said official US data could be overstating job creation by up to 60,000 jobs a month. Recent data shows the economy has added about 40,000 jobs a month since April, but the actual number could be closer to losing 20,000 jobs a month.

The US economy may be slowing, but recession risk remains low, according to analysis by TMC Research, a unit of The Milwaukee Company, a wealth manager.