It's unclear just how large the Fed's rate cut will be.
Wednesday, September 18, 2024 10:21AMHaving all but tamed inflation, the Federal Reserve is poised to do something Wednesday it hasn't done in more than four years: Cut its benchmark, a step that should lead to lower borrowing costs for consumers and businesses just weeks before the presidential election.
High interest rates and elevated prices for everything from groceries to gas to rent have fanned widespread public disillusionment with the economy and provided a line of attack for former President Donald Trump's campaign. Vice President Kamala Harris, in turn, has charged that Trump's promise to slap tariffs on all imports would raise prices for consumers much further.
Yet after several years of strong job growth, employers have slowed hiring, and the unemployment rate has risen nearly a full percentage point from its half-century low in April 2023 to a still-low 4.2%. Once unemployment rises that much, it tends to keep climbing. But Fed officials and many economists note that the rise in unemployment largely reflects an increase in new workers seeking jobs - notably new immigrants and recent college graduates - rather than layoffs.
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