The US Federal Reserve cut interest rates for the second time this year on Wednesday, aiming to boost the sluggish labor market. The rate decrease was smaller than President Donald Trump had requested, however.
Federal Reserve Chair Jerome Powell expressed uncertainty about future interest rate cuts, saying that another quarter-point reduction in December is not a certainty. This has led to a decline in stocks and a weakening of the dollar.
The decision came as the US government shutdown continues to affect economic activity. However, Federal Reserve officials believe that its impact will be temporary. Inflation remains a concern, with prices rising faster than expected, which may complicate efforts to revive employment.
The Fed must balance its dual mandate: keeping inflation under control and promoting maximum employment. With the labor market stagnant, the central bank is facing pressure from President Trump to cut interest rates more aggressively.
President Trump has pushed for larger rate cuts, as much as 3 percentage points, in an effort to boost economic growth. However, his efforts have been met with resistance from Federal Reserve officials who are cautious about further rate reductions.
The Fed's decision was seen as a compromise, cutting the benchmark interest rate by just one quarter of a percentage point. Last month, the Fed had projected two additional quarter-point rate cuts over the remainder of the year.
Federal Reserve Chair Jerome Powell expressed uncertainty about future interest rate cuts, saying that another quarter-point reduction in December is not a certainty. This has led to a decline in stocks and a weakening of the dollar.
The decision came as the US government shutdown continues to affect economic activity. However, Federal Reserve officials believe that its impact will be temporary. Inflation remains a concern, with prices rising faster than expected, which may complicate efforts to revive employment.
The Fed must balance its dual mandate: keeping inflation under control and promoting maximum employment. With the labor market stagnant, the central bank is facing pressure from President Trump to cut interest rates more aggressively.
President Trump has pushed for larger rate cuts, as much as 3 percentage points, in an effort to boost economic growth. However, his efforts have been met with resistance from Federal Reserve officials who are cautious about further rate reductions.
The Fed's decision was seen as a compromise, cutting the benchmark interest rate by just one quarter of a percentage point. Last month, the Fed had projected two additional quarter-point rate cuts over the remainder of the year.
. One minute they're cutting them down to boost employment and the next they're all like "hold up, we need to keep an eye on inflation" 
. It's like trying to solve a puzzle while someone keeps changing the rules 
.
. I mean, if you cut interest rates that much, it could lead to more inflation and debt problems 
. But at the same time, I can understand why he'd want to boost employment 
. It's like they're stuck in this economic limbo where neither side wants to budge 
.
Can't they just make a decision already? 
I'm still trying to wrap my head around why the Federal Reserve didn't cut rates more aggressively considering the US government shutdown has been dragging on for ages. It seems like they're playing it safe by making small cuts. The President's demands are getting a bit too much, tbh... 3 percentage points is wild talk! 
. but like, isn't it weird how everyone's always in a rush to lower interest rates? can't they just chill for a sec and let inflation do its thing? 
. The Fed's got a tough job balancing employment and inflation, but it's not rocket science... or at least I thought it wasn't 
. Can't help feeling like they're just patching up symptoms rather than fixing the underlying issues 
.
. Like, I get why they wanna cut rates to boost the labor market, but it feels like they're just trying to paper over some bigger issues 
. Inflation's getting out of control and nobody knows how to tame it 
. And on top of that, we've got this government shutdown going on... it's like, can't we all just get along? 
I dunno, maybe I'm just being too optimistic, but I think the Fed made a decent compromise decision 
. Just hope they can figure out how to make it work without causing more problems down the line 
. It's all about balancing two things: keeping inflation in check (which is kinda cool 
) and making sure people have jobs (which sounds super important 
). The thing is, with the shutdown and all, it's not like they can just magic away economic troubles 
Still, I guess it's better than nothing 
️?
I'm kinda glad the interest rate cut is smaller this time, but what if it doesn't work out? We'll be back to square one in no time... 3 percentage points seems crazy, who's gonna make that happen? 
so yeah i'm not too surprised by this decision, still hoping for better job market tho 
! AND YEAH, PRESIDENT TRUMP'S GETTING A LITTLE CARRIER THAN HE NEEDS TO, YOU KNOW? JUST LET THE MARKET DO ITS THING, PEOPLE!
The Fed seems so caught up in balancing inflation with employment rates. It's like trying to juggle too many balls at once – sometimes you drop one, but that doesn't mean the whole act falls apart.
I feel like a smaller rate drop might be the right call though. Too much and it'll just fuel inflation worries 
I mean, it's not like a ton or anything, but it's def a step in the right direction for the economy. I know some ppl are salty that it wasn't 3 percentage points, lol, but come on, the Fed can't just go wild with their interest rates. They gotta keep inflation under control and all that jazz.
I mean, who needs a beach when you can explore ancient temples and try all the delicious food? 
Anyway, back to the Fed's decision... I guess it's like trying to decide which ramen noodle flavor to get - they had to choose between smaller or not-so-small cuts 
. But seriously, I wonder if President Trump's pressure is making the Fed more cautious about cutting rates. It's like when you're trying to plan a party and your friend keeps changing their mind on the guest list 