The Federal Reserve is poised to cut interest rates for the first time in over four years, but the size of the cut remains uncertain. While inflation has cooled, the Fed is also focusing on supporting a weakening job market.
WASHINGTON — Having 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 interest rate, a step that should lead to lower borrowing costs for consumers and businesses just weeks before the presidential election.
Over time, Fed rate cuts should lower borrowing costs for mortgages, auto loans and credit cards, as well as for business loans. Business spending could grow, and so could stock prices. Companies and consumers could refinance loans into lower-rate debt., that Fed officials feel confident that inflation has largely been defeated. It has plummeted from a peak of 9.1% in June 2022 to, not far above the Fed's 2% target.
At issue is how fast the Fed wants to lower interest rates to a point where they're no longer acting as a brake on the economy — nor as an accelerant. Where that so-called “neutral” level falls isn't clear, though many analysts peg it at 3% to 3.5%. Economists who favor a half-point reduction argue that the Fed's key rate is much higher than necessary now that inflation is in retreat.
Federal Reserve Interest Rates Inflation Economy Job Market
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Jobs report will help Federal Reserve decide how much to cut interest ratesWASHINGTON (AP) — Friday's monthly jobs report will likely mark a pivotal moment for the economy and the Federal Reserve.
Read more »
Jobs report will help Federal Reserve decide how much to cut interest ratesWASHINGTON (AP) — Friday's monthly jobs report will likely mark a pivotal moment for the economy and the Federal Reserve.
Read more »
Sluggish US jobs report clears the way for Federal Reserve to cut interest ratesWASHINGTON (AP) — Hiring by America’s employers picked up a bit in August from July’s tepid pace, and the unemployment rate dipped for the first time since March in a sign that the job market may be cooling but remains sturdy.
Read more »
U.S. Federal Reserve policy-makers say they are ready to cut interest ratesOne policy-maker said he could support back-to-back reductions, or a bigger cut in borrowing costs, should the cooling labour market need support
Read more »
US inflation reaches a 3-year low as Federal Reserve prepares to cut interest ratesWASHINGTON (AP) — The post-pandemic spike in U.S. inflation eased further last month as year-over-year price increases reached a three-year low, clearing the...
Read more »
US inflation reaches a 3-year low as Federal Reserve prepares to cut interest ratesWASHINGTON (AP) — The post-pandemic spike in U.S. inflation eased further last month as year-over-year price increases reached a three-year low, clearing the way for the Federal Reserve to cut interest rates next week.
Read more »