Fed cuts rates 0.25 point, reacting to weak job numbers
Summary
The Federal Reserve lowered its interest rate by 0.25 points due to slow job growth during the summer. This decision follows President Trump's calls for lower rates, but the Fed's officials do not foresee deeper cuts. The action highlights differences within the Fed, particularly among Trump appointees.Key Facts
- The Fed cut its target interest rate by 0.25%, setting it between 4% and 4.25%.
- The cut is a response to weaker job growth and a slight increase in the unemployment rate.
- President Trump had been urging for larger rate cuts, but the Fed officials did not support deeper cuts.
- A new Fed governor, Stephen Miran, favored a larger half-point cut, showing internal disagreement.
- Fed projections suggest two more small rate cuts this year.
- Job growth slowed to an average of 27,000 jobs per month from May to August.
- Inflation pressures remain high, with the Consumer Price Index rising to 2.9% in August.
- Fed forecasts project GDP growth at 1.6% for the year and an unchanged unemployment rate at 4.5%.
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