The Fed at a crossroads
The U.S. Fed cut interest rates for the first time since December, lowering the benchmark to 4–4.25%. Markets are betting on more cuts ahead, but the picture is complicated:
Key takeaways:
- Job growth has slowed sharply, averaging just 27,000 new roles per month since May
- Consumer spending and services remain strong, with markets buoyant
- Inflation is ticking higher, now at 2.6%, partly due to tariffs
The Fed faces a delicate balancing act — easing enough to support the labor market without reigniting inflation or overstimulating financial markets.
One rate cut may serve as insurance. But going further could risk a costly course correction later.
Source: https://www.economist.com/leaders/2025/09/17/americas-monetary-policy-risks-getting-too-loose
