Fed cuts interest rates for 2nd time this year, but rejects large reduction sought by Trump

The Federal Reserve has cut interest rates for the second time this year, but stopped short of a larger reduction urged by President Donald Trump. The move, announced on Wednesday, brings the benchmark interest rate down by 0.25 percentage points to 3.5%, its lowest level since 2022.

The decision was widely expected and aims to boost the flagging labor market, which has been struggling with slow hiring and rising inflation. However, President Trump had repeatedly called for larger rate cuts, up to 3 percentage points, in an effort to mitigate the economic impact of tariffs.

Fed Chair Jerome Powell expressed uncertainty about another interest rate cut at the next meeting in December, saying that it's not a foregone conclusion. "A further reduction of the policy rate in December is not a foregone conclusion -- in fact, far from it," he told reporters on Wednesday.

The Fed's move has mixed implications for the economy, which faces a dual threat of stagflation - slow hiring and rising inflation. While lower interest rates could stimulate spending, they also risk boosting inflation further.

President Trump's pressure campaign at the Fed has been unprecedented, with the president trying to fire two board members over allegations against them. However, their status remains uncertain, and it's unclear whether Trump's efforts will succeed in bringing about larger rate cuts.

The decision is a significant shift in tone for the Fed, which had previously signaled that interest rates might remain on hold through 2024 due to concerns about inflation. The move suggests that policymakers are taking steps to address economic risks, but also acknowledges the uncertainty surrounding the labor market and inflation outlook.

As the Fed navigates this complex landscape, it's clear that the central bank must balance competing demands - keeping inflation under control and maximizing employment. With inflation picking up in recent months, while hiring has slowed, the Fed faces a delicate balancing act to avoid an economic double whammy.

So I'm thinking... if interest rates are going down, that's a good thing for people who have loans or mortgages 'cause they'll be paying less each month . But at the same time, it's not all sunshine and rainbows - too much money churning around could lead to inflation . And what about President Trump wanting those bigger rate cuts? I'm just curious, do you guys think he's getting his way?

The thing is, I get what they're trying to do here... lower interest rates can definitely help boost the labor market, and all that jazz . But I'm still not entirely convinced that it's going to work out . I mean, we've seen this movie before - easy money and then a recession . And now they're trying to navigate stagflation? That's like, economy 101 . It's gonna be interesting to see how this plays out, but I'm still keeping my expectations low... for now

omg u guys i just can't even rn so i was talking to my girlfriend about this interest rate thingy and she's like what does it mean for us i told her basically it means we might be able to afford that new car we've been eyeing but then again there's a risk of inflation getting outta control which would kinda suck so idk maybe the fed knows what they're doing or maybe not i mean president trump is being super pushy about it and stuff so yeah lol

you know i was talking to my friend who works at a small business last week and he told me his cash flow is really struggling because of these rising interest rates it's like they can't even get loans or credit from the bank anymore anyway i think its good that the fed is trying to do something about inflation, idk if 0.25% is gonna make a huge difference though and president trump's been breathing down their necks for weeks, that's just crazy what's next?

This is gonna be interesting... I'm loving the new lower interest rates tho, it's like my budget's gonna breathe a sigh of relief . But at the same time, I'm all about that employment life , so I hope this doesn't mess with hiring numbers too much. The Fed's got a tough balancing act to pull off, and I'm curious to see how they navigate stagflation . One thing's for sure, it's gonna be a wild ride !

oh man, i'm loving the fact that the fed just cut interest rates again it's like, we're finally seeing some movement on the labor market and inflation front but at the same time, trump's been all over the place with his rate cuts and i'm not sure if the fed's gonna go for it full steam ahead i mean, they did say it's not a foregone conclusion, so let's keep an eye on that

The thing is, people gotta think about the bigger picture here... lower interest rates might be good for jobs, but if we're already seeing inflation rise... then isn't that like trying to put out a fire with more gas? I mean, what's gonna happen when everyone gets back into buying/selling stuff and prices start climbing again? It's all so delicate... can't have the economy go from bad to worse if we're not careful

lol what's with all the drama at the Fed? they finally did something about those pesky interest rates... 0.25% is pretty chill tho. i feel for trump trying to get more rate cuts though, gotta respect his hustle anyway, hope it doesn't mess up the economy too much. stagflation is a real thing right now and i'm low-key excited to see how this all plays out

The thing is, I think it's crazy how much pressure President Trump's putting on the Fed to lower interest rates. It's like, he wants a big bang of economy growth, but the thing is, the economy can't just magically heal itself. They need some time to figure out what's going on and make some real changes.

And I get it, the labor market is struggling and people are losing their jobs, that's not okay. But cutting interest rates by a small amount isn't gonna fix everything. It's like, we're playing with fire here, and if we're not careful, inflation could just take off again.

I'm actually kinda worried about the Fed's decision to cut rates now. I mean, it's a good thing they're trying to address the economic risks, but it feels like they're just throwing a band-aid on a bigger problem. We need some real solutions here, not just temporary fixes.

It's all about balance, right? Keeping inflation under control and maximizing employment. It's like, how do you make that work when things are so unpredictable?

I don't know what's going on with the economy rn . One sec, I'm in a test and can't respond ASAP. But after I get this done, I was thinking...lower interest rates are like giving your parents a bigger allowance . They'll just spend it and boost inflation . And if they don't cut it enough, then what's the point? It feels like the Fed is playing a game of economic whack-a-mole - every time they fix one thing, another problem pops up.

It's kinda like in Econ class when we're discussing supply and demand...if you reduce interest rates, people will just borrow more and want more stuff . I don't know if lowering it by 0.25% is gonna make a big difference though .

just think about it lol, so we got the fed making moves again but is it gonna be enough? i mean, trump's been pushing for big rate cuts and all that jazz but i'm not sure if it'll make a huge difference. plus, the fed chair's being super cautious, saying there's no guarantee of another cut in december so yeah, this is a mixed bag for the economy. we got stagflation on one hand and low rates on the other... like, which way does it go?

I'm totally with the Fed on this one! They need to keep a close eye on inflation levels, don't want it to get outta control. But at the same time, lower interest rates could really help boost employment numbers - that's the ultimate goal, right? It's like they're trying to find that perfect balance between keeping prices stable and getting people back to work. Jerome Powell's being super cautious, but I think that's a good call - can't just rush into another rate cut without knowing what's going on with the economy. And let's be real, President Trump's trying to push for some pretty drastic changes... not sure how much influence he really has over the Fed's decisions .

I think its interesting how the Fed is attempting to address stagflation by lowering interest rates, but the risk of boosting inflation further could be significant. The dual threat of slow hiring and rising inflation means they need to tread carefully to avoid a policy misstep.

I'm not sure what to make of President Trump's pressure campaign at the Fed - it seems like he's trying to impose his will on the central bank, but it's unclear whether that'll lead to more rate cuts. The Fed Chair's comments about uncertainty and it not being a foregone conclusion suggest they're still weighing their options carefully.

The decision does signal a shift in tone for the Fed, though - from signaling no changes through 2024 to taking steps to address economic risks. It's clear they need to find a balance between keeping inflation under control and maximizing employment. That's not an easy tightrope to walk!

The Fed just cut interest rates again and it's like they're trying to stimulate the economy , but at the same time, we gotta be careful not to spark inflation . It's all about finding that sweet spot where people have jobs and can spend money without prices going through the roof . I'm kinda surprised they didn't go for a bigger cut like President Trump wanted, though . The Fed Chair is being super cautious and it's hard to predict what'll happen next . We just gotta keep an eye on inflation and see how things play out .

So the Federal Reserve just cut interest rates... again They're trying to boost the labor market, but it's not that simple. I mean, have you seen some of those job ads out there? "Entry-level position available" lol like who's actually applying for something with no experience? Anyway, the thing is, if they lower interest rates too much, inflation could go through the roof... and we all know how that ends . I'm not gonna lie, I'm a bit curious to see what happens at the next meeting in December - will they actually cut more or just stick with 3.5%?

This rate cut feels like a middle ground for the Fed . I think it's good that they're trying to address the labor market issues, but also keeping inflation in check is super important . It's crazy how President Trump is pushing for bigger cuts - I get why he wants to help the economy, but rate cuts are like a tightrope walk, you know? Too little and it's not enough, too much and it's a recipe for disaster . The Fed needs to find that sweet spot where everyone wins .

The fed just did a 0.25% rate cut lol but still no huge deal for trump is like they're just trying to keep him from getting all bent outta shape about tariffs, right? also can't help but think the economy's in a weird spot - inflation's rising but hiring's slow... it's like, what's the plan here?

I'm shocked the Fed didn't just cave to Trump's demands and lower rates by 3 whole percentage points like that would've solved all our problems . All joking aside, it's good they stopped short of a bigger cut, but still a bit concerning that they're keeping the rate at 3.5% now. I mean, isn't that just encouraging more borrowing and potentially inflating things further? At least Powell's being cautious about making another decision in December, I guess that's one good thing .

I think its kinda weird how Trump is pushing for bigger rate cuts but its not gonna happen lol...the Feds trying to balance employment and inflation is a tough one 3.5% is def a low rate tho , dont wanna see the economy tanking rn