(FreePressBeacon.com) – In good news for Americans coming right after the 2024 election, the Federal Reserve has made a decisive move by cutting interest rates again in order to stimulate economic growth amid underlying global uncertainties.
As the Fed reduces rates to boost the U.S. economy, several concerns linger over inflation, employment, and potential political interference.
The Federal Reserve cut its key interest rate by a quarter-point, responding to declining inflation.
This marks the second consecutive rate cut following a half-point reduction in September.
The Fed’s benchmark rate is now about 4.6%, a further reduction from the previous 5.3%, NBC New York points out in a report.
The move underscores the Fed’s proactive stance in maintaining economic stability amid international uncertainties.
Inflation, which peaked at 9.1% in mid-2022, has decreased to 2.4% in September, allowing room for these rate adjustments.
Meanwhile, the Fed aims to support the job market by stemming potential setbacks that might arise from wavering global economies.
According to Fed Chairman Jerome Powell, the “job is not done on inflation,” emphasizing the importance of this new policy direction.
When asked if this decision relates to the upcoming election, Powell firmly stated that “in the near term, the election will have no effects on our (interest rate) decisions,” highlighting a commitment to focus on economic indicators over political influences.
“This further recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we move towards a more neutral stance,” Powell said.
The Fed’s recent actions reflect a cautious approach to sustaining market confidence and avoiding economic downturns.
However, concerns regarding possible interference from the Biden administration loom, reminiscent of debates during Trump’s presidency where tensions over economic strategies were frequent.
Powell has reassured markets that he will not resign if pressured, noting he doesn’t believe the President can legally fire him, CNBC reports.
Economists remain watchful of inflation influenced by proposed tariffs, potentially raising rates to 2.75%-3% by mid-2026.
While consumer spending remains robust, fueling continued growth, it also raises fears of overstimulation.
Companies have reduced hiring, urging the Fed to act to support employment further.
“In the near term, the election will have no effects on our (interest rate) decisions,” Powell said.
This economic dynamic sends mixed signals: robust growth counterbalanced by the challenges of slowing hiring.
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