The Federal Reserve is poised to cut interest rates for the first time in eight months, according to economists and market sentiment. The decision comes after a weak jobs report revealed a sharp slowdown in the labor market, which could prompt the Fed to reduce borrowing costs as a means of warding off an economic slowdown.
President Trump has repeatedly called for lower interest rates since taking office, but the Fed has defied his pressure campaign by holding interest rates steady. However, economists now predict a quarter-point interest rate cut, with investors pegging the chances at nearly 96%.
The Fed’s dual mandate to keep inflation under control and maximize employment is being weighed against an expectation of slower job growth. A recent inflation report came in lower than expected, giving policymakers the numbers they need to start cutting rates.
The labor market slowdown could set off alarm bells for central bankers wary of a possible rise in the unemployment rate. However, economists say that tariff-induced inflation effects may lag behind policy changes, giving policymakers a misguided sense of comfort with price levels.
The Fed’s decision is not influenced by political pressure, according to Fed Chair Jerome Powell, who has rejected the notion of political interference in the Fed’s policy decisions. The central bank will make its decision based solely on economic data and the evolving outlook.
Source: https://abcnews.go.com/Business/fed-ready-cut-interest-rates-experts-weigh/story?id=124610911