The Federal Reserve is moving onto its next mission after the first rate cut since ratcheting them up to tame the rate of price increases.
Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington, Wednesday, Sept. 18, 2024. since ratcheting them up to tame the rate of price increases earlier this week marked a symbolic end to its fight with inflation and the beginning of a new phase to steer the economy into a soft landing .
Projections released along with the FOMC’s policy statement showed governors are also expecting to make two more cuts, each at 25 basis points, before the end of the year. That is a much more rapid pace than a few months ago when the board was more inflation focused. There were questions after the aggressive half-percentage point cut if that was an acknowledgement the Fed was behind on its timeline to start reducing rates. Powell said that the cut was not a signal that they waited too long but rather a commitment to avoid falling behind.
Keeping the labor market intact is one of the chief challenges for the Fed to navigate as it eases interest rates to a more neutral level where they do not spur or slow economic activity.have grown more prominent in recent months. Unemployment rose to 4.2% last month compared to 3.7% in January and the rate at which businesses have added jobs has also declined.
Interest Rates Inflation Economic Activity Labor Market Unemployment Policy Statement Soft Landing
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