\n<\/p>\n
The Fed just announced an interest rate cut by a quarter point, which was largely anticipated amid a weakening labor market.<\/p>\n
This is the first time the Fed has cut rates since December 2024. Rates now stand at a range of 4% to 4.25%, the lowest since November 2022.<\/p>\n
Stay tuned for a press conference Fed chair Jerome Powell is expected to give at 2.30pm ET.<\/p>\n
chartShare<\/p>\n
Updated at\u00a014.43 EDT<\/p>\n
<\/span><\/span><\/p>\n Key events<\/p>\n <\/span>Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/span><\/p>\n <\/span><\/p>\n Powell responded to a question about comments new Fed governor Stephen Miran made at his confirmation hearing in front of the Senate earlier this week.<\/p>\n Miran said that the Fed actually has a \u201cthird mandate\u201d, which is to \u201cmoderate long-term interest rates\u201d.<\/p>\n The introduction of a third mandate is in opposition to how Powell has framed the Fed\u2019s \u201cdual mandate\u201d \u2013 balancing unemployment and price increases.<\/p>\n \u201cWe always think of it as the dual mandate,\u201d Powell said, explaining that moderate interest rates come from <\/em>stable inflation.<\/p>\n \u201cAs far as I\u2019m concerned, there\u2019s no thought of \u2026 incorporating that in a different way,\u201d he said.<\/p>\n Share<\/p>\n Updated at\u00a015.49 EDT<\/p>\n Markets appear to be relatively unresponsiveness to the Fed\u2019s highly anticipated rate cut. Both the S&P and Nasdaq are both slightly down for the day, while the Dow is up.<\/p>\n It\u2019s a stark contrast to last week, when markets shot up at data that showed wholesale prices falling slightly in August, and consumer inflation being within expectations for the month.<\/p>\n The overall picture that Powell has painted of the economy in his press conference isn\u2019t necessarily one that\u2019s thriving. Powell said that the economy has left the Fed in an \u201cunusual\u201d situation, and said that the Fed\u2019s rate cut is more about \u201crisk management\u201d rather than an testament to a strong economy. The recent rate cut could cause inflation to rise, but risks of the job market worsening under current rates are higher.<\/p>\n \u201cWe\u2019ve seen much more challenging economic times from a policy standpoint, the standpoint of what we\u2019re trying to accomplish, it\u2019s challenging to know what to do,\u201d Powell said. \u201cThere are no risk-free paths now.\u201d<\/p>\n Share<\/p>\n Powell was, again, questioned about Stephen Miran\u2019s role as both a new Fed governor and Trump\u2019s chair to the Council of Economic Advisor.<\/p>\n A reporter asked Powell how the Fed can be nonpolitical if one of its voting members is explicitly connected to politics. Powell emphasized that there are 12 voting members and 19 total participants on the board.<\/p>\n \u201cThe only way for any voter to really move things around is to be incredibly persuasive, and the only way to do that in the context in which we work is to make really strong arguments based on the data and one\u2019s understanding of the economy,\u201d Powell said. \u201cThat\u2019s really all that matters. \u2026 That\u2019s in the DNA of the institution, that\u2019s not going to change.\u201d<\/p>\n Share<\/p>\n Updated at\u00a015.52 EDT<\/p>\n A Politico reporter asked Powell how Americans will be able to tell if the Fed, which has historically been nonpartisan, starts to be partisan.<\/p>\n \u201cWe don\u2019t frame these questions at all or see them in terms of political outcomes. In another part of Washington, everything is seen through the lens of does it help or hurt this political party, this politicians,\u201d Powell said. \u201cThat\u2019s the framework. People find it hard to believe that\u2019s not at all the way we think about things at the Fed. We take a longer perspective, we\u2019re trying to serve the American people as best as we can.\u201d<\/p>\n \u201cI think you would be able to tell. I don\u2019t think we\u2019ll ever get to that place.\u201d<\/p>\n When asked about Fed governor Lisa Cook\u2019s lawsuit against Donald Trump for her firing (a court reinstated her last week), Powell said: \u201cI see it as a court case that I would see as inappropriate for me to comment on.\u201d<\/p>\n Share<\/p>\n Powell said that Fed officials are expecting inflation from tariffs to be a one-time price level increase, though \u201cwe can\u2019t just assume that, [and] or job is to make sure that\u2019s what happens.\u201d<\/p>\n \u201cWe continue to expect it to move up,\u201d Powell said of prices. \u201cMaybe not as high as we would have expected it to.\u201d<\/p>\n He added that the case for \u201cpersistent inflation\u201d is weaker.<\/p>\n Which is why the Fed cut rates, what he described as a \u201cneutral\u201d policy, given that inflation isn\u2019t out of control, but the labor market has slowed down.<\/p>\n But Powell acknowledged that it\u2019s \u201can unusual situation\u201d \u2013 the Fed would most likely want to be more careful with rate cuts because of inflation, but has to be wary of the labor market.<\/p>\n \u201cOur tools can\u2019t do two things at once,\u201d he said.<\/p>\n Share<\/p>\n Powell is again describing the labor market as being in a \u201ccurious balance\u201d \u2013 a term that he first used in his Jackson Hole speech last month.<\/p>\n The labor market is balanced out, meaning that the supply of workers is on par with the demand that employers have for workers, but it\u2019s not necessarily a sign of strength.<\/p>\n Because of immigration, \u201cthe supply of workers is coming down\u201d, Powell noted. \u201cAt the same time, demand for workers has come down quite sharply to the point where we see what I\u2019ve called a \u2018curious balance\u2019.\u201d<\/p>\n \u201cTypically, when we say things are in balance that sounds good,\u201d he added. \u201cBut in this case, the balance is because both demand and supply have come down sharply, now demand is coming down more sharply because we now see the unemployment rate going up.\u201d<\/p>\n Share<\/p>\n Updated at\u00a015.51 EDT<\/p>\n A reporter asked Jerome Powell about Stephen Miran\u2019s appointment, specifically on the fact that Miran is the first Fed governor to also have a role in the executive branch while also serving on the Fed board. Miran is the chair of the Council of Economic Advisors.<\/p>\n \u201cThe committee remains united in pursuing our dual mandate goals,\u201d Powell said in response. \u201cWe\u2019re strongly committed to maintaining our independence and beyond that, I really don\u2019t have anything to share.\u201d<\/p>\n Share<\/p>\n Fed chair Jerome Powell just started his press conference on the Fed\u2019s rate cut decision.<\/p>\n As outlined in the board\u2019s statement, Powell said that the unemployment rate, while still generally low, has edged up.<\/p>\n \u201cJob gains have slowed and the downside risks to unemployment have risen,\u201d he said.<\/p>\n Powell pointed to new immigration policy as a major factor in the labor market slowdown.<\/p>\n \u201cA good part of the slowing likely reflects a decline in the growth of the labor force, due to lower immigration and lower labor force participation,\u201d Powell said. \u201cEven so, labor demand has softened and the recent pace of job creation appears to be running below the breakeven rate needed to hold the unemployment rate constant.\u201d<\/p>\n The median projection for the unemployment rate, which is currently at 4.3%, sees it rising to 4.5% by the end of the year.<\/p>\n Powells also said higher tariffs have begun to push up some prices in some categories of goods, though the full impact have yet to be seen. Price increases due to tariffs could be a one-time price increase or it could lead to \u201cpersistent\u201d inflation.<\/p>\n \u201cOur obligation is to ensure that a one-time price increase in the price level does not become an ongoing inflation problem,\u201d he said.<\/p>\n Much of this is what Powell said during his speech last month at the Fed\u2019s symposium in Jackson Hole, during which he first suggested that the Fed was looking toward an interest rate cut.<\/p>\n Share<\/p>\n Updated at\u00a014.39 EDT<\/p>\n In economic projections released after the Fed\u2019s rate-cute decision, members of the Fed\u2019s board submitted their economic predictions for the economy over the next few years.<\/p>\n A slight majority of board members seem to expect another rate cut by the end of the year, while a majority see more rate cuts in 2026. Board members are predicting a slight increase in unemployment, though they seem to think that inflation will largely cool in 2026 and 2027.<\/p>\n It\u2019s a more dovish take on the economy than how the Fed is describing the current economy in its board statement, where the Fed said that the labor market has slowed and inflation is going up \u2013 a dynamic that points to an economic condition known as stagflation.<\/p>\n Share<\/p>\n Before Fed chair Jerome Powell can expand on the Fed\u2019s decision in his 2.30pm ET press conference, right now we just have the Fed\u2019s statement on its rate cut to parse through why officials voted for a cut.<\/p>\n Notably, the Fed\u2019s rate-setting board took note of the jobs market.<\/p>\n \u201cJob gains have slowed, and the unemployment rate has edged up but remains low,\u201d it said. It also noted that \u201cinflation has moved up and remains somewhat elevated\u201d.<\/p>\n This is a change from the board\u2019s last meeting in July, when it said that labor market conditions \u201cremain solid\u201d. And this is the first time the board has said inflation is going up.<\/p>\n The statement also noted that Stephen Miran, Trump\u2019s appointee to the board who was confirmed on Monday, was the only member of the board to vote against the rate cut. Miran wanted to lower rates by a half-point, instead of a quarter-point.<\/p>\n Share<\/p>\n Updated at\u00a014.44 EDT<\/p>\n The Fed just announced an interest rate cut by a quarter point, which was largely anticipated amid a weakening labor market.<\/p>\n This is the first time the Fed has cut rates since December 2024. Rates now stand at a range of 4% to 4.25%, the lowest since November 2022.<\/p>\n Stay tuned for a press conference Fed chair Jerome Powell is expected to give at 2.30pm ET.<\/p>\n chartShare<\/p>\n Updated at\u00a014.43 EDT<\/p>\n Inflation rose slightly in August as companies continued to push the cost of tariffs on to consumers.<\/p>\n The newest update to the consumer price index (CPI), which measures a basket of goods and services, showed that prices increased 2.9% over the last year \u2013 the highest since January. Core CPI, which excludes energy and food costs, stayed stable at 3.1% after going up in July.<\/p>\n Despite this slight uptick in inflation, Wall Street remains optimistic that the Federal Reserve will cut interest rates at the central bank\u2019s board meeting next week. The Fed is under intense pressure from Donald Trump to cut rates, but the decision looks likely to be led by fears that the US jobs market is weakening.<\/p>\n Investors are anticipating a quarter-point rate cut. Rates currently stand at a range of 4.25% to 5.5%.<\/p>\n Share<\/p>\n The Fed chair Jerome Powell indicated last month that the central bank was gearing up to cut interest rates for the first time this year.<\/p>\n For months, policymakers defied public calls from Trump to lower rates \u2013 and brushed off his increasingly aggressive criticism of the Fed\u2019s decision to hold them steady.<\/p>\n \u201cWith policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,\u201d Powell said in a closely scrutinized speech at the Jackson Hole symposium in Wyoming, highlighting a \u201cchallenging\u201d dichotomy of risks: that Trump\u2019s tariffs might increase inflation, while his immigration policies knock the US labor market.<\/p>\n Concerning economic signs, including data indicating that the labor market has stalled while inflation picked up, have reinforced expectations that many policymakers will want to tread carefully in the months ahead.<\/p>\n Trump has already suggested that he will be unhappy with the modest cut the Fed is widely expected to unveil later. Powell \u201cMUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND\u201d, the US president wrote on his Truth Social platform early on Monday, claiming: \u201cHOUSING WILL SOAR!!!\u201d<\/p>\n ShareCallum Jones<\/span><\/p>\n The Trump administration\u2019s extraordinary bid to fire Lisa Cook, a Fed governor appointed by Biden, and remove her from the central bank\u2019s board before this meeting, has so far failed.<\/p>\n Late on Monday, a federal appeals court rejected Trump\u2019s request to block Cook from attending the Fed\u2019s latest rate-setting session, which started yesterday.<\/p>\n The president cited unconfirmed allegations of mortgage fraud as he attempted to fire Cook, who has denied wrongdoing and argued Trump has no authority to fire her. Her term is not due to expire until 2038.<\/p>\n No president has pursued such action \u2013 and moved to dismiss a governor at the Fed, which has long been independent from political interference \u2013 since the central bank\u2019s founding in 1913.<\/p>\n Trump has made no secret of his hopes to increase his oversight of the Fed, calling into question the future of its longstanding independence from political oversight by publicly describing plans to swiftly build \u201ca majority\u201d on its board.<\/p>\n ShareCallum Jones<\/span><\/p>\n The Trump administration raced to strengthen its influence over the Fed ahead of this week\u2019s meeting.<\/p>\n Stephen Miran, a senior official who served as chair of the White House council of economic advisers, was confirmed by Senate Republicans as a Fed governor on Monday evening, and formally sworn in on Tuesday.<\/p>\n His appointment marks the first time in the history of the modern Federal Reserve, which stretches back almost a century, that a sitting member of the executive branch will also work at the highest levels of the central bank.<\/p>\n While Miran described the Fed\u2019s independence as \u201ccritical\u201d during a confirmation hearing earlier this month, and pledged to preserve it as governor, his decision to only take unpaid leave from his current job at the White House, rather than resign, raised questions over his ability to operate independently.<\/p>\n Share<\/p>\n The US Federal Reserve is expected to announce the first interest rate cut since December as a two-day policy meeting nears its end.<\/p>\n The Fed started the meeting on Tuesday, hours after Donald Trump\u2019s new appointee narrowly won confirmation to join the central bank \u2013 while Fed governor Lisa Cook continues to fight her removal by the president.<\/p>\n Stephen Miran, the chair of Trump\u2019s Council of Economic Advisers, took the oath of office as a Fed governor early on Tuesday after narrowly winning a Senate confirmation vote along party lines on Monday night.<\/p>\n There is little doubt that the Fed will make its first interest rate cut of 2025 after the latest gathering, as policymakers pivot towards shoring up a deteriorating jobs market.<\/p>\n But concerns about political influence targeting the independent central bank looms over the gathering, as Trump repeatedly bashes Fed Chair Jerome Powell over his rate decisions, and after he moved to fire governor Lisa Cook, sparking a legal battle.<\/p>\n On Tuesday, Trump told reporters that the Fed should \u201clisten to smart people like me\u201d.<\/p>\n Share<\/p>\n Updated at\u00a014.39 EDT<\/p>\n","protected":false},"excerpt":{"rendered":" Fed cuts interest rate by a quarter point The Fed just announced an interest rate cut by a quarter point, which was largely anticipated amid a weakening labor market. This is the first time the Fed has cut rates since December 2024. Rates now stand at a range of 4% to 4.25%, the lowest since<\/p>\n","protected":false},"author":1,"featured_media":22003,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[562,319,519,132,6558,3116,520,517,286,127,1569],"class_list":{"0":"post-22002","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-cuts","9":"tag-federal","10":"tag-interest","11":"tag-live","12":"tag-point","13":"tag-quarter","14":"tag-rates","15":"tag-reserve","16":"tag-time","17":"tag-updates","18":"tag-year"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/22002","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=22002"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/22002\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/22003"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22002"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22002"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22002"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Powell suggests only ‘really strong arguments’ not politics can move Fed board decisions<\/h2>\n
Powell describes labor market as being in a ‘curious balance’ as demand is down at same time as worker supply dropped<\/h2>\n
Powell holds press conference on rate cut decision<\/h2>\n
Fed cuts interest rate by a quarter point<\/h2>\n
Federal Reserve expected to cut interest rates amid Trump pressure<\/h2>\n