(Reuters) - The Federal Reserve cut its benchmark interest rate by a quarter of a percentage point on Wednesday and indicated it will steadily reduce borrowing costs through the end of this year as policymakers responded to concerns about a weak labor market, in a move that won the support of most of U.S. President Donald Trump's central bank nominees.

Only new Fed Governor Stephen Miran, who joined the Fed on Tuesday and is on leave as head of the White House Council of Economic Advisers, dissented in favor of a 50 basis point cut.

The cut, along with projections showing two more quarter-point reductions are expected at the remaining two policy meetings this year, indicate that Fed officials have begun to downplay the risk that the administration's loose trade policies will spur persistent inflation and are now more concerned about weakening growth and the likelihood of rising unemployment.

The cut, the first by the Federal Open Market Committee, which sets monetary policy, since December, moves the benchmark rate to the 4.00% to 4.25% range.

"The committee is mindful of the risks to both sides of its dual mandate and judges that downside risks to employment have increased," the Fed said in its policy statement."Job gains have slowed and the unemployment rate has risen."

Fed Chair Jerome Powell will hold a press conference at 3:30 p.m. ET to explain the latest statement and the economic outlook.

New economic projections showed that monetary policymakers in the median still see inflation ending this year at 3%, well above the U.S. central bank's 2% target, a projection unchanged from the Fed's last set of forecasts published in June. The unemployment estimate was also unchanged at 4.5%, and economic growth was slightly higher, at 1.6% versus 1.4%.

REDUCING THE RISK OF STAGFLATIONS

Compared to the stagflation risks contained in the last set of projections, with the Fed slowing rate cuts to prevent inflation, the new projections show an emerging sentiment among policymakers that they can avoid any rise in unemployment with a faster pace of cuts, while inflation slowly eases next year.

Fed officials have gradually warmed to the idea that Trump's tariffs would have only a temporary impact on inflation, and the latest forecasts are consistent with that view.

The shift to a more consistent pace of cuts was supported by Fed Governor Christopher Waller and Vice Chair of Supervision Michelle Bowman, Trump appointees who dissented from the late July policy decision to keep rates unchanged.

Miran disagreed with the latest cut and appears to have made the sharpest reductions in the projections issued since his arrival on the board on Tuesday. In the latest estimates, a 2.875% interest rate projection for the end of 2025 stands out as 0.75 percentage points lower than the next lowest projection. Trump has been demanding sharp rate cuts.

Also voting in favor of the decision was Fed Governor Lisa Cook, who attended the meeting despite Trump's efforts to fire her and after two courts upheld her challenge to the removal attempt.