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2025-09-15 08:30:02
[Under Trump's Pressure, Fed Debate Expected to Shift to the Pace of Rate Cuts] The Federal Reserve is expected to resume rate cuts for the first time in nine months in response to a slowing labor market, stubborn inflation, and unprecedented pressure from US President Trump to lower rates. However, this week's rate cut does not necessarily signal the start of a sustained cycle of rate cuts. A series of disappointing data has heightened concerns that the labor market could be heading for a deeper slowdown, which could drag down consumer spending and economic growth. However, inflation remains above the Fed's 2% target, and tariffs could further push up prices. These factors could lead some policymakers to worry about moving too quickly. Former Philadelphia Fed President Pat Harker stated that the first action, as expected on September 17th, would typically mark the beginning of a cycle of rate hikes or cuts. However, this time, "it's unclear whether this cycle will be clearly initiated." Disagreement among Fed officials over the next move could result in multiple dissenting votes, with some arguing for no rate cut and others calling for a larger reduction. This could be the first meeting with three dissenting votes since 2019, and possibly even the first since 1990 with four dissenting votes.
