Business
Fed cuts rate but future easing uncertain
Danielle KayeBusiness reporter
ReutersThe US Federal Reserve has lowered interest rates for the third time this year, even as internal divisions create uncertainty about additional cuts in the coming months.
The central bank said on Wednesday it was lowering the target for its key lending rate by 0.25 percentage points, putting it in a range of 3.50% to 3.75% – its lowest level in three years.
But policymakers disagree about how the Fed should balance competing priorities: a weakening job market on the one hand, and rising prices on the other.
The Fed’s economic projections released on Wednesday suggest one rate cut will take place next year, although new data could change this.
Fed chair Jerome Powell said central bankers need time to see how the Fed’s three cuts this year work their way through the US economy. Policymakers will closely examine incoming data leading up to Fed’s next meeting in January, he added.
“We are well-positioned to wait to see how the economy evolves,” Powell told reporters.
Those hoping for interest rates to keep coming down, including President Donald Trump, might have to wait.
The Fed is facing a “very challenging situation” as it confronts risks of rising inflation and unemployment, Powell said, adding: “you can’t do two things at once”.
The decision to lower rates on Wednesday was not unanimous, suggesting widening divisions among central bankers over the outlook for the US economy.
Three Fed officials broke ranks and officially dissented.
Stephen Miran, who is on leave from his post leading Trump’s Council of Economic Advisers, voted for a larger 0.5 percentage point cut.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, and Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, voted to hold rates steady.
Trump, who has repeatedly urged Powell to lower rates, said after the meeting on Wednesday that the Fed’s cut could have been “at least doubled”.
“Our rates should be much lower,” he said at a roundtable at the White House. “We should have the lowest rates in the world.”
A data blackout during the longest-ever US government shutdown, which ended in November, has left policymakers partially in the dark about the state of the economy. But concerns about a slowing job market continue to outweigh inflation fears, at least for now.
The unemployment rate ticked up from 4.3% to 4.4% in September, Labor Department figures showed in a delayed report released last month. Cutting interest rates is aimed at stimulating the job market by creating lower borrowing costs for businesses.
Fears about tariff-driven inflation had taken centre stage earlier this year when Trump pushed forward with sweeping tariffs on many of the country’s largest trading partners.
Inflation is still above the Fed’s 2% target. In September, it hit 3% for the first time since January.
But while tariffs appear to be boosting some consumer prices, recent milder-than-expected inflation readings have allowed the Fed to focus on boosting the labour market by lowering rates, analysts said.
Dissents and disagreements
Still, policymakers remain divided over the path forward for interest rates.
Asked about disagreement among policymakers, Powell acknowledged that it’s “unusual” to have “persistent tension” between the Fed’s two mandates to keep prices stable and unemployment low.
“And when you do, this is what you see,” he said, referring to growing divisions.
Still, Powell characterised the internal debate between Fed officials as thoughtful and respectful.
“We come together and we reach a place where we can make a decision,” he said.
The central bank’s so-called dot plot, a quarterly anonymous economic forecast, showed on Wednesday a median expectation for one additional 0.25 percentage point cut in 2026.
That prediction was unchanged from the previous dot plot in September.
Central bankers are poised to have a bit more clarity next week, with the expected release of official data on the labour market and inflation for November.
The incoming data could shift policymakers’ outlook, potentially bolstering calls for further easing next year if there are new signs that the job market is stalling.
Who will succeed Powell?
Trump’s search for Powell’s replacement as Fed chair, once his term ends next May, is adding to uncertainty about the path forward for Fed policy.
Trump could announce his pick as soon as within the next few weeks.
Kevin Hassett, a long-time conservative economist and key Trump economic adviser, is seen as the front-runner to succeed Powell.
A Trump loyalist, Hassett served as chair of the White House Council of Economic Advisers during Trump’s first term and now leads the National Economic Council.
He has been a stalwart defender of Trump’s economic policies, downplaying data showing signs of weakness in the US economy, doubling down on allegations of bias at the Bureau of Labor Statistics and backing Trump’s handling of the Fed.
Hassett’s allegiance to the president has drawn questions from analysts about whether he would act independently and how much sway he would have with other members of the board.
Other names that have been floated for the Fed chair include economist Kevin Warsh, current Fed Governor Christopher Waller and even Treasury Secretary Scott Bessent.
Trump is “still making up his mind, and he’s looking for someone who will be in his way of thinking,” Thomas Hoenig, a distinguished senior fellow at the Mercatus Center, told the BBC.
The candidates, he added, “have to project that they will be independent, or the markets will become quite nervous – and that will create more volatility”.
Asked on Wednesday whether Trump’s search for a new Fed chair is hindering his job or changing his thinking, Powell responded with a resounding “no”.
Business
New Income Tax Act 2025 to come into effect from April 1, key reliefs announced in Budget 2026
New Delhi: Finance Minister Nirmala Sitharaman on Sunday said that the Income Tax Act 2025 will come into effect from April 1, 2026, and the I-T forms have been redesigned such that ordinary citizens can comply without difficulty for ease of living.
The new measures include exemption on insurance interest awards, nil deduction certificates for small taxpayers, and extension of the ITR filing deadline for non-audit cases to August 31.
Individuals with ITR 1 and ITR 2 will continue to file I-T returns till July 31.
“In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in record time, and the Income Tax Act 2025 will come into effect from April 1, 2026. The forms have been redesigned such that ordinary citizens can comply without difficulty, for) ease of living,” she said while presenting the Budget 2026-27
In a move that directly eases cash-flow pressure on individuals making overseas payments, the Union Budget announced lower tax collection at source across key categories.
“I propose to reduce the TCS rate on the sale of overseas tour programme packages from the current 5 per cent and 20 per cent to 2 per cent without any stipulation of amount. I propose to reduce the TCS rate for pursuing education and for medical purposes from 5 per cent to 2 per cent,” said Sitharaman.
She clarified withholding on services, adding that “supply of manpower services is proposed to be specifically brought within the ambit of payment contractors for the purpose of TDS to avoid ambiguity”.
“Thus, TDS on these services will be at the rate of either 1 per cent or 2 per cent only,” she mentioned during her Budget speech.
The Budget also proposes a tax holiday for foreign cloud companies using data centres in India till 2047.
Business
Budget 2026 Live Updates: TCS On Overseas Tour Packages Slashed To 2%; TDS On Education LRS Eased
Union Budget 2026 Live Updates: Union Budget 2026 Live Updates: Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026-27 in Parliament, her record ninth budget speech. During her Budget Speech, the FM will detail budgetary allocations and revenue projections for the upcoming financial year 2026-27. Sitharaman is notably dressed in a Kanjeevaram Silk saree, a nod to the traditional weaving sector in poll-bound Tamil Nadu.
The budget comes at a time when there is geopolitical turmoil, economic volatility and trade war. Different sectors are looking to get some support with new measures and relaxations ahead of the budget, especially export-oriented industries, which have borne the brunt of the higher US tariffs being imposed last year by the Trump administration.
On January 29, 2026, Sitharaman tabled the Economic Survey 2025-26, a comprehensive snapshot of the country’s macro-economic situation, in Parliament, setting the stage for the budget and showing the government’s roadmap. The survey projected that India’s economy is expected to grow 6.8%-7.2% in FY27, underscoring resilience even as global economic uncertainty persists.
Budget 2026 Expectations
Expectations across key sectors are taking shape as stakeholders look to the Budget for support that sustains growth, strengthens jobs and eases financial pressures:
Taxpayers & Households: Many taxpayers want practical improvements to the income tax structure that preserve simplicity while supporting long-term financial planning — including broader deductions for home loan interest and diversified retirement savings options.
New Tax Regime vs Old Tax Regime | New Income Tax Rules | Income Tax 2026
Businesses & Industry: With industrial output and investment showing resilience, firms are looking for policies that bolster capital formation, ease compliance, and expand infrastructure spending — especially in manufacturing and technology-driven sectors that promise jobs and exports.
Startups & Innovation: The startup ecosystem expects incentives around employee stock options and capital access, along with regulatory tweaks that encourage risk capital and talent retention without increasing compliance burdens.
Also See: Stock Market Updates Today
The Budget speech will be broadcast live here and on all other news channels. You can also catch all the updates about Budget 2026 on News18.com. News18 will provide detailed live blog updates on the Budget speech, and political, industry, and market reactions.
We are providing a full, detailed coverage of the union budget 2026 here, with a lot of insights, experts’ views and analyses. Stay tuned with us to get latest updates.
Also Read: Budget 2026 Live Streaming
Here are the Live Updates of Union Budget 2026:
New Delhi: The Cabinet on Sunday approved the Union Budget 2026-27 during a meeting in Parliament chaired by Prime Minister Narendra Modi. A meeting of the Union Cabinet was held at Sansad Bhawan at 10 a.m., and after the Cabinet’s approval, Finance Minister Nirmala Sitharaman proceeded to Parliament to present the Budget.
Earlier, FM Sitharaman met President Droupadi Murmu and offered her a copy of the digital budget. The President also offered ‘dahi-cheeni’ (curd and sugar) to Sitharaman when she arrived at the Rashtrapati Bhavan. The Finance Minister was seen carrying her trademark ‘bahi-khata’, a tablet wrapped in a red-coloured cloth bearing a golden-coloured national emblem on it.
Minister of State for Finance Pankaj Chaudhary, Chief Economic Advisor Dr V. Anantha Nageswaran, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal and other officials were seen accompanying the Finance Minister. Sitharaman was set to present her ninth consecutive Union Budget in the Lok Sabha. In 2021, she switched to using a digital tablet to carry the Budget papers, further promoting a modern and eco-friendly approach.
The ‘bahi-khata’ is a red pouch that holds the digital tablet containing the Budget documents. This year, Sitharaman opted for a deep maroon Kanjeevaram saree from Tamil Nadu. The saree featured a deep maroon base with a contrasting border and subtle gold detailing, paired with a yellow blouse.
The Budget is likely to strike a deft balance of sustaining growth momentum and maintaining fiscal consolidation. It also needs to address near-term challenges emanating from unprecedented geopolitical flux, said economists. According to economists, the budget is likely to focus more on capital expenditure, especially in sectors deemed to be strategically important owing to prevailing geopolitical compulsions.
While the FY26 Budget was more tilted towards stimulating middle-class consumption with tax reliefs, the FY27 Budget’s approach to stimulating consumption will be selective, they added.
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