Fed Cut Interest Rate, Warning Sign For Economy.
The Federal Reserve cut interest rates Wednesday for the first time this year as the central bank attempts to ease pressure on the weakening U.S. job market.
The Federal Open Market Committee (FOMC) — the panel of Fed officials responsible for setting borrowing costs — cut its baseline interest rate to a range between 4 percent and 4.25 percent, a reduction of 0.25 percentage points.
Analysts and traders widely expected the Fed to cut interest rates Wednesday after several months of alarming employment data and unprecedented pressure from President Trump, who has sought to remove members of the Fed’s board.
While Federal Reserve Chair Jerome Powell, the main subject of Trump’s pressure campaign, had previously said he was wary of cutting rates until the inflationary effect of Trump’s tariffs sorted out, the fading U.S. labor market pushed the Fed to risk its progress in the fight against rising prices.by Sylvan Lane ‘The Hill’
Inflation is part of post pandemic life, there is no way to underestimate the implications it has had on the broader economy and the in the political realm as well. Donald Trump ascended to the White House a second time in large part on promises to cut prices and end the high grocery prices that continue to strain Main Street and lead to economic upheaval. With hiring now stalled the only way the Fed sees as a remedy to jump start jobs is to lower interest rates but inflation is already ticking up and that will lead to higher prices. A happy medium seems to be unattainable.
