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The Fed Faces Economic Uncertainty and Political Pressure as It Decides Whether to Cut Rates
The Federal Reserve considers a quarter-point rate cut amid inflation above 2% and slower hiring, facing unprecedented political pressure and internal divisions among officials.
- Federal Reserve officials met on Tuesday and Wednesday in Washington to decide whether to cut interest rates amid economic uncertainty and political pressure.
- The Fed faces this decision because the U.S. economy shows slowed hiring, stubbornly high inflation above the 2% target, and political challenges including President Trump's effort to remove Governor Lisa Cook.
- Recent data indicate that employers cut 13,000 jobs in June and only increased payrolls by 22,000 in August, while the year-over-year increase for consumer prices, excluding the volatile food and energy sectors, reached 3.1% in August.
- Economist David Andolfatto highlighted that central banks face significant challenges when inflation rises alongside weakening labor market conditions, while Ellen Meade emphasized that at critical moments, there is often legitimate debate about the appropriate timing for policy changes.
- Investors anticipate the Federal Reserve will lower its key interest rate by 0.25 percentage points to around 4.1%, although some policymakers might oppose the move, and political tensions could make the decision more contentious amidst ongoing inflation and sluggish employment growth.
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The Fed faces economic uncertainty and political pressure as it decides whether to cut rates
The Federal Reserve is facing economic uncertainty and political pressure as it meets this week to decide whether to cut interest rates.
·United States
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Total News Sources39
Leaning Left4Leaning Right2Center22Last UpdatedBias Distribution79% Center
Bias Distribution
- 79% of the sources are Center
79% Center
14%
C 79%
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