The Federal Reserve cut rates for a third consecutive time this afternoon, and opened the door to a January pause amid growing uncertainty on the economy’s underlying trajectory.

In the widely-expected decision, the Federal Open Market Committee voted by a surprisingly balanced 9-to-3 margin to lower the target range for the federal funds rate to between 3.50 and 3.75 percent. Trump appointee Stephen Miran against dissented from the majority in favour of a bigger move, while Austan Goolsbee and Jeffery Schmid supported staying on hold.

Markets had feared a more profound divergence would be on display, given that the October meeting minutes showed considerable differences of opinion among the various voting members.

In a tweak to the statement setting out the decision, officials noted that the “extent and timing of additional adjustments” to rates would depend on updated assessments of “incoming data, the evolving outlook, and the balance of risks,” suggesting that the bulk of the committee would prefer to sit the January meeting out, waiting for a clearer view of economic fundamentals before moving forward. Other parameters were left largely unchanged, with economic activity seen “expanding at a moderate pace,” job creation slowing, and inflation firming at “elevated levels”.

As is customary, the statement language stopped short of signalling future moves, but the all-important “dot plot” Summary of Economic Projections showed the median policymaker still expects to cut rates only once more in 2026—a less aggressive pace than the two moves currently priced into futures markets. Median core inflation expectations inched lower to 2.5 percent for the year ahead, down from 2.6 percent in September, and growth forecasts were raised to 2.3 percent from 1.8 percent previously.

The dollar is selling off amid modest price action and Treasury yields are pushing lower on the policy-sensitive front end of the curve as investors await further insight in the post-decision press conference, where Chair Powell is expected to read off his cautious, data-dependent, and ever-so-hawkish playbook. Market positioning could shift dramatically if he deviates from the script in any way, and we will update you if a material impact is felt in foreign exchange markets.