WASHINGTON (AP) — The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this wee
WASHINGTON — The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week.
In a statement after its latest meeting ended, the Fed said the “unemployment rate has moved up but remains low,” while inflation has fallen closer to the central bank's target but “remains somewhat elevated.” The economy is clouding the picture by flashing conflicting signals, with growth solid but hiring weakening. Consumer spending, though, has been healthy, fueling concerns that there is no need for the Fed to reduce borrowing costs and that doing so might overstimulate the economy and even re-accelerate inflation.
Economists at Goldman Sachs estimate that Trump’s proposed 10% tariff, as well as his proposed taxes on Chinese imports and autos from Mexico, could send inflation back up to about 2.75% to 3% by mid-2026.
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