The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week.

The rate cut follows a larger half-point reduction in September, and it reflects the Fed’s renewed focus on supporting the job market as well as fighting inflation, which now barely exceeds the central bank’s 2% target.

Thursday’s move reduces the Fed’s benchmark rate to about 4.6%, down from a four-decade high of 5.3% before September’s meeting. The Fed had kept its rate that high for more than a year to fight the worst inflation streak in four decades. Annual inflation has since fallen from a 9.1% peak in mid-2022 to a 3 1/2-year low of 2.4% in September.

Asked at a news conference how Trump’s election might affect the Fed’s policymaking, Chair Jerome Powell said that “in the near term, the election will have no effects on our (interest rate) decisions.”

But Trump has proclaimed that as president, he should have a voice in the central bank’s interest rate decisions. The Fed has long guarded its role as an independent institution able to make difficult decisions about borrowing rates, free from political interference. Yet during his previous term in the White House, Trump publicly attacked Powell after the Fed raised rates to fight inflation, and he may do so again.

In a statement after its latest meeting ended, the Fed said the “unemployment rate has moved up but remains low,” and while inflation has fallen closer to the 2% target level, it “remains somewhat elevated.”

After their rate cut in September — their first such move in more than four years — the Fed’s policymakers had projected that they would make further quarter-point cuts in November and December and four more next year. But with the economy now mostly solid and Wall Street anticipating faster growth, larger budget deficits and higher inflation under a Trump presidency, further rate cuts may have become less likely.

Financial markets are throwing yet another curve at the Fed: Investors have sharply pushed up Treasury yields since the central bank cut rates in September. The result has been higher borrowing costs throughout the economy, thereby diminishing the benefit to consumers of the Fed’s half-point cut in its benchmark rate, which it announced after its September meeting.

Economists at Goldman Sachs estimate that Trump’s proposed 10% tariff, as well as his proposed taxes on Chinese imports and autos from Mexico, could send inflation back up to about 2.75% to 3% by mid-2026.

— Associated Press

Mortgage rates rise for second week

The average rate on a 30-year mortgage in the U.S. rose for the sixth straight week, returning to its highest level since early July.

The rate ticked up to 6.79% from 6.72% last week, mortgage buyer Freddie Mac said Thursday. That’s still down from a year ago, when the rate averaged 7.5%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also edged higher this week. The average rate rose to 6% from 5.99% last week. A year ago, it averaged 6.81%, Freddie Mac said.

More Americans seek jobless benefits

The number of Americans applying for jobless aid ticked up last week but layoffs remain at historically low levels.

The Labor Department reported Thursday that jobless claim applications rose by 3,000 to 221,000 for the week of Nov. 2. That’s fewer than the 227,000 analysts forecast.

The four-week average of weekly claims, which softens some of the week-to-week fluctuations, fell by 9,750 to 227,250.

Weekly applications for jobless benefits are considered representative of U.S. layoffs in a given week.

Continuing claims, the total number of Americans collecting jobless benefits, rose by 39,000 to 1.89 million for the week of Oct. 26. That’s the most since late 2021.

— From news services