On 17/9, following a two-day policy meeting, the Fed decided to lower its benchmark interest rate by 25 basis points to 4-4.25%. This decision aligned with market expectations.
This is the Fed's first monetary policy adjustment this year. After three consecutive rate cuts last year, the central bank paused to observe market trends. Fed officials wanted to better assess US inflation and employment trends, especially after President Donald Trump announced a series of import tariffs.
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Fed Chair Jerome Powell at a press conference on 30/7. Photo: Reuters |
Fed Chair Jerome Powell at a press conference on 30/7. Photo: Reuters
This Fed meeting was considered unusual and unprecedented due to changes within the Board of Governors and significant political pressure from President Trump, who has repeatedly attempted to influence the Fed in recent months.
The day before the Fed meeting, the US Senate confirmed Stephen Miran, Trump's nominee, as a temporary member of the Board of Governors. On the same day, Fed Governor Lisa Cook received a ruling from the Court of Appeals that the president could not dismiss her for mortgage fraud.
Before the meeting, the market was almost certain of a 25 basis point (0.25%) rate cut. Recent indicators pointed to a weakening US labor market. Meanwhile, some Fed officials believed the impact of import tariffs on inflation might be short-lived.
In a speech late last month, Fed Chair Jerome Powell hinted at a possible rate cut, emphasizing the "increased risks to employment." Other Fed officials expressed similar concerns.
According to data from the US Department of Labor, the average number of new jobs created in the US between June and August was only about 29,000 per month. This figure was only slightly higher than the 15-year low set the previous month. There are currently more job seekers than available positions. Unemployment claims for the week ending 6/9 reached a near four-year high. In August, the number of people unemployed for over 26 weeks hit a four-year high.
Ha Thu (Reuters)
