Federal Reserve cuts US interest rates for first time since December
a day ago
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- #Interest Rates
- #Federal Reserve
- The US Federal Reserve cut interest rates to a range of 4% to 4.25%, the first cut since December.
- Fed Chair Jerome Powell cited slowing job gains and rising downside risks to unemployment as reasons for the cut.
- Powell warned that Trump's tariffs could lead to persistent inflation, not just a one-time price increase.
- Trump attempted to fire Fed governor Lisa Cook over alleged mortgage fraud, but courts blocked the move.
- Biden-appointed Fed governor Adriana Kugler resigned in August, replaced by Stephen Miran, who dissented on the rate cut decision.
- Powell hinted at a rate cut during the Jackson Hole symposium, citing uncertainty from immigration and trade policies.
- The labor market shows a 'curious balance' with slowed supply and demand for workers, raising risks of higher unemployment.
- Trump's tariffs have caused a steady rise in prices, with inflation climbing to 2.9% in August.
- Economists are concerned about 'stagflation' if both unemployment and prices continue to rise.
- The Congressional Budget Office noted tariffs have accelerated price increases beyond initial expectations.