The US Federal Reserve is expected to deliver a further interest rate cut Wednesday despite divisions among its ranks, with chief Jerome Powell’s ability to secure support from fellow policymakers put to the test.Financial markets expect a third straight 25 basis points reduction, bringing levels to a range between 3.50 percent and 3.75 percent. This would be the lowest in around three years.But divides within the Fed have grown even as policymakers voted to slash rates twice in recent months to boost the weakening employment market.”We look for at least two dissents in favor of no action and one in favor of a larger cut,” said Michael Feroli, chief US economist at JP Morgan.”There are almost equally compelling reasons to cut and to hold,” he added in a recent note.The Fed’s rate-setting committee consists of 12 voting members — including seven members of the board of governors, the New York Fed president and a rotation of reserve bank presidents — who take a majority vote in deciding the path of rates.Powell noted in October that inflation separate from President Donald Trump’s tariffs is not too far from officials’ two-percent target.But the costs of goods have risen on the back of Trump’s wide-ranging levies this year, and some officials are cautious that higher prices could become persistent.The Fed pursues maximum employment and stable prices as it decides the path of interest rates, although the goals can sometimes be in conflict. Lower rates typically stimulate the economy while higher levels hold back activity and tamp down inflation.- ‘Risk management’ -Powell will likely be able to “persuade several hesitant policymakers to support a third consecutive ‘risk management’ rate cut,” said EY-Parthenon chief economist Gregory Daco.This comes as the most recent available figures confirmed a slowdown in the jobs market, while a government shutdown from October to mid-November delayed the publication of more updated federal data.But Daco also expects Powell to signal “firmly that additional easing is unlikely before next spring,” unless there is material weakening in the world’s biggest economy.This is because rates are close to “neutral,” a level that neither stimulates nor restricts economic activity, analysts believe.Feroli of JP Morgan observed that most Fed governors appear to favor lowering rates, while most reserve bank presidents seem inclined to keeping them unchanged.But New York Fed President John Williams’ remarks that there was room for another cut in the near-term tilts the balance.”We believe he was speaking for the rest of the leadership,” Feroli said, referring to Powell and Vice Chair Philip Jefferson. “This should weigh the votes firmly toward a cut.”Meanwhile Fed Governor Stephen Miran, who is on leave from his role heading the White House Council of Economic Advisers, is expected to push for a larger rate cut.- Litmus test -This week’s gathering is the last before 2026, a year of key changes for the central bank — including the accession of a new chief and tests of its independence as political pressure mounts.In an interview with Politico published Tuesday, Trump signaled that he would judge Powell’s successor on whether they immediately cut interest rates.Asked if this was a “litmus test” for his handpicked candidate, Trump responded “yes.”Powell’s term as Fed chair ends in May 2026, and Trump has hinted that he wants to nominate his chief economic adviser Kevin Hassett to the top post.Hassett currently chairs the White House National Economic Council, and appears to be in lockstep with the president on key economic questions facing the Fed.If appointed, however, Hassett could also face pressure from financial markets to diverge from the White House on interest rates — particularly if inflation worsens.Miran’s term as governor also ends in January, creating an opening among the Fed’s top officials. And Trump has sought to free up another seat in attempting to fire Fed Governor Lisa Cook earlier this year.Cook challenged her ousting, and the Supreme Court barred the president from immediately removing her while awaiting oral arguments on the case in January.

Donald Trump may have dismissed US cost of living issues as a “hoax,” but his most loyal supporters are feeling the pinch — even if they still back the president to fix the problem.Hundreds of people, many bundled up with red “Make America Great Again” beanies, waited in the biting cold Tuesday to see Trump talk up his economic agenda at a casino in rural Pennsylvania.Several told AFP they are worried about high prices but stopped short of blaming the 79-year-old billionaire.”Personally, yes, prices are high right now… but things have to get worse before they get better,” said Brianna Shay, 26, clutching a sign reading “Trump Gives Us Hope.””Unfortunately, the president before really screwed us, really bad,” she said, echoing Trump in blaming his Democratic predecessor Joe Biden for the situation.”I think people are going to be able to afford to live again. But he has been president for just under a year now. You know he can’t fix all that in under a year,” said Shay, a public education administrator.Under pressure from his Republican Party, Trump has softened his message on inflation by acknowledging an affordability “problem,” having dismissed it last week as a “con job.”His appearance at Mount Airy Casino Resort, which was flanked by snowy fields and a partially frozen lake on Tuesday, was part of an effort to boost messaging that he is reducing inflation.Inside the packed conference hall, Trump lapped up the attention of a lively crowd that cheered his claims that US prices are falling “tremendously.”And the president again pinned lingering economic issues on his predecessor, prompting boos from the audience, with one woman shouting “I hate Joe Biden!”But even devoted followers like Tevin Dix — one of the first people queuing to hear Trump’s speech — noted the gravity of the financial situation.”Things are a little difficult, people are struggling,” said Dix, an air conditioning technician. Still, the 30-year-old was confident that Trump’s proposed solutions — including his sweeping levies on US trading partners — would yield results soon. “If the tariffs continue to keep pounding and getting other countries to bring jobs back and put more Americans back to work,” said Dix, who wore a Christmas-style jumper with Trump’s portrait.Many Americans, however, at least partly blame tariffs for worsening the cost of living, according to polls that show Trump’s approval rating at its lowest since his January return to office.Despite recognizing some financial concerns, people at the Pennsylvania rally were keen to praise Trump on other policies, such as his crackdown on migrants. And others simply shrugged off the suggestion of financial hardship. “Just past Black Friday was the biggest sales ever. If everybody’s broke, I don’t know where the money came from,” said Mark Johnson, 70.”All my investments are doing good. I’m happy. You can’t cure everything overnight. It’s gonna take a while,” the retiree added, holding a cutout of Trump wearing a Santa hat.

Honduran President Xiomara Castro on Tuesday denounced what she called tampering with results in the recent general election, and accused US counterpart Donald Trump of interfering in the vote.The final votes are still being counted after the November 30 presidential election, and suspicions of interference have been fueled by successive computer failures that have stalled tallying.Trump-backed conservative candidate Nasry Asfura, 67, on Monday had 40.53 percent of votes, followed closely by right-wing candidate Salvador Nasralla with 39.16 percent, according to the National Electoral Council (CNE).Nasralla has also complained about alleged electoral corruption and on Monday described the results as “theft,” arguing he was in fact leading by 20 percent.Both are well ahead of the candidate from Castro’s left-wing Libre party, Rixi Moncada.Speaking at a rally in the center of the country, Castro said people had taken part in the election with “courage and determination.”However, she said the process was marked by “threats, coercion, manipulation of the TREP” — the country’s preliminary results system — and “tampering with the popular will.”Castro also claimed Trump had “interfered” in the election by threatening Hondurans that there would be “consequences” if they voted for Moncada.Trump declared his clear support for Asfura in the final stretch of the campaign, declaring him a “friend of freedom” and accusing Nasralla of merely “pretending to be an anti-communist.”Trump also issued a surprise pardon of former Honduran president Juan Orlando Hernandez, who had been serving a 45-year prison sentence in the United States on drug charges of helping traffic hundreds of tons of cocaine.Nasralla is demanding a “vote-by-vote” recount of the tallies which, according to him, show “a pattern of fraud where biometric recognition was not used and the tallies were drafted arbitrarily.”More than a week after the elections, thousands of voting records with “inconsistencies” still need to be reviewed, election officials said.Late Sunday, the Libre party demanded “the total annulment” of the elections and called for protests and strikes, while urging officials not to cooperate with the government transition.- Request to Interpol -The Trump administration said Monday that the election had been fair and that there was “no credible evidence” justifying its annulment.The electoral council has until December 30 to declare a winner, according to Honduran law.Amid the uncertainty over who will succeed Castro, Honduran Attorney General Johel Zelaya requested Tuesday that Interpol execute an arrest warrant against ex-president Hernandez.The warrant was issued in 2023 — when Hernandez was already in US custody — over alleged money laundering and fraud.On Tuesday, Hernandez’s lawyer, Renato Stabile, dismissed the prosecutor’s request, linking it to a “desperate and shameful attempt” by the Honduran left to “remain in power,” according to a statement to AFP in the United States.The former Honduran president, who is from the same party as Trump’s favored candidate Asfura, has ruled out returning to Honduras anyway because he fears for his life, according to his wife Ana Garcia.