The Federal Reserve is cutting interest rates again, which is good news for farmers and other business borrowers, but it remains unclear how fast and how far the Fed will move from here.

At its mid-September meeting, the Fed's Federal Open Market Committee opted for a quarter-point cut. That brought its benchmark federal fund rate to a range of from 4% to 4.25%.

With the job market showing signs of weakening lately, the cut was widely expected. Fed Chair Jerome Powell signaled it in a speech last month. Eleven of the 12 voting FOMC members voted for the cut, with the 12th dissenting in favor of a half-point reduction.

But there was less unanimity about the future among the committee's 19 members -- seven Fed governors and 12 Federal Reserve bank presidents, five of whom vote on a rotating basis.

In the so-called "dot plot" that the members fill out with their economic projections four times a year, 10 of the 19 forecast at least two more quarter-point rate cuts this year while two members forecast only one cut and seven predicted no more cuts this year. (https://www.federalreserve.gov/…) The Fed stresses that these are individual members' projections, not policy plans.

Until this cut, the central bank had left rates unchanged this year after slashing them a full percentage point in the last four months of 2024. The Fed has two goals -- maximum employment and price stability -- and with employment looking solid and inflation stubbornly refusing to come down to the Fed's 2% target, the Fed saw greater risks to price stability and opted to keep monetary policy restrictive.

In recent months, though, job creation has stalled. "The balance of risks has shifted," Fed Chair Jerome Powell said at his post-meeting press conference.

It hasn't, however, shifted so dramatically that a rapid series of cuts is guaranteed. The 19 FOMC members' median GDP forecast is for 1.6% growth this year and 1.8% next year -- slow, but not recessionary. Powell noted that these forecasts were actually "a touch stronger" than the members' median forecasts three months ago.

The dissenter pushing for a half-point interest rate cut was Stephen Miran, who is on leave from serving as chair of President Donald Trump's Council of Economic Advisors. The president has been putting unprecedented pressure on the Fed to lower rates rapidly. He has even tried to force Fed Governor Lisa Cook off the board so he could fill the position with someone more likely to vote his way.

As the president steps up the pressure, many analysts believe the Fed's independence is at stake. For the time being, the strong consensus behind the quarter-point cut is reassuring on that score. Two other governors appointed by the president voted for the smaller cut.

Powell said basing decisions on economic and not political grounds is deeply rooted in the Fed's DNA. The president said he favors Fed independence but thinks the Fed should "listen to smart people like me."

Too much pressure could prove counterproductive, stoking inflation fears in bond investors. If they perceive the Fed making decisions for political reasons, they would push long-term interest rates higher.

The Fed's influence is strongest on short-term rates. The bond market sets long-term rates. Long-term rates are what matter most to farmers, ranchers and other business borrowers.

How far the Fed will lower interest rates is as uncertain as how fast. President Trump wants rates several percentage points lower, which would take inflation-adjusted interest rates into negative territory.

Traditionally, the Fed's aim has been to strive for the so-called "neutral" rate of interest. That's the rate that neither stimulates nor restrains the economy, the rate that's consistent with maximum employment and price stability.

No one knows exactly what the neutral rate is, and it's likely a moving target, but the Fed has often treated it as being roughly 1 percentage point higher than the inflation rate. As the Fed's inflation goal is 2%, the placeholder for the neutral rate has typically been 3%.

A glance at the latest dot plot shows a considerable majority of the 19 think the fed funds rate will be between 3% and 4% the next three years. None saw it below 2.3%. The median projection is 3.6% at the end of this year, 3.4% at the end of 2026 and 3.1% at the end of 2027.

Of course, those forecasts will change with the economy. In response to a question at the press conference, Powell conceded the 19 probably don't have great confidence in the forecasts. "Forecasters," he said, "are a humble lot with much to be humble about."

Urban Lehner can be reached at urbanize@gmail.com

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