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We did it, Jerome.
“It” being lowering rates, and “Jerome” being, well, everyone’s favorite Deadhead who just so happens to be the Federal Reserve chairman. You know the one.
But really, they did it: The Federal Reserve cut rates for the first time since 2020, voting to lower interest rates by a half percentage point.
That’s a particularly aggressive cut: With the exception of emergency cuts during the pandemic, the Federal Open Market Committee hasn’t enacted a cut that substantial since the financial crisis in 2008, CNBC reported.
And Jerome Powell went out of his way to clarify that we shouldn’t assume cuts of this magnitude will continue.
“We’ve waited. And I think that patience has really paid dividends in the form of our confidence that inflation is moving sustainably under 2%, so I think that is what enables us to take this strong move today,” Powell said. “I do not think that anyone should look at this and say, ‘Oh, this is the new pace.’”
The vote to lower rates, which 11 out of 12 Fed voters backed, will lower the federal funds rate to a range of 4.75% to 5%.
In its rate cut announcement, the Fed noted a slowdown in job growth, while stressing that inflation was nearing the central bank’s 2% goal. Later, in a call with reporters, Powell took time to explain that the job market isn’t a cause for concern, even if it’s weakening.
“The labor market is in solid condition, and our intention with our policy move today is to keep it there,” he said. “You can say that about the whole economy: The US economy is in good shape. It’s growing at a solid pace, inflation is coming down. The labor market is at a strong pace. We want to keep it there.”