Interest rates cut for third time this year slashing borrowing costs for millions of Americans... but Wall Street's worried about what's round the corner

The Federal Reserve cut interest rates for the third time this year.

Today, the 12 officials at America's central bank announced a modest quarter–point reduction that will lower borrowing costs for millions of Americans.

It's now marked between 3.5 and 3.75 percent, the lowest since 2023. Wall Street's three major indexes immediately shot up around a half-percent from earlier trading on the news. 

The Fed's push to get a grip on inflation has been complicated by fresh worries about the job market, with recent reports showing more Americans struggling to find work. 

While today's cut offers some relief, investors are now laser-focused on what happens next. And they just received some shaky news. 

Today, nine of the committee members agreed with the quarter-point reduction. Of the three people descenting, Governor Stephen Miran wanted a steeper half-point reduction, and two regional presidents wanted to hold rates steady. 

But investors were watching the committee's dot plot, which could lay out potential future cuts to the Fed's interest rate. 7 members expect interest rates will hold steady in early 2026. 

Interest rates have remained elevated after 57 straight months of stores yanking down old tags and slapping up pricier ones.

The Fed's as efforts to calm inflation have been tampered with recent jobs uncertainty. 

Challenger, Gray & Christmas, a firm that track layoffs, reported on last week that 71,321 Americans received pink slips in November. That's a 24 percent increase from the same month last year. 

The federal government's own data also shows some worrying signs for US employees: September's employment survey showed that the unemployment rate had increased from 4.4 percent to 4.5 percent. 

While the central bank has publicly committed to trying to bring inflation down to around 2 percent, one asset manager said the Fed has secretly abandoned that effort. 

'This will never be formalized or admitted publicly,' said Tom Hulick, CEO of Strategy Asset Managers. 'But the Federal Reserve's target inflation has effectively been raised to 3 percent.'

This is a breaking news story. Updates to come.