With the end of their two-year fight against inflation in sight, Federal Reserve officials on Wednesday are likely to set the stage for the first cut to their key interest rate in four years.

WASHINGTON (AP) — With the end of their two-year fight against inflation in sight, Federal Reserve officials are likely Wednesday to set the stage for the first cut to their key interest rate in four years, a major shift in policy that could eventually lower borrowing costs for U.S. consumers and businesses.

Inflation has been falling steadily closer to the Fed’s 2% target for the past several months. And the job market has cooled, with the unemployment rate rising about a half-point this year to 4.1%. Fed officials have said that they are seeking to balance the need to keep rates high enough to control inflation without keeping them too high for too long and causing a recession.

  • @TheDemonBuer
    8•1 month ago

    Ok, so unemployment is up slightly (though still historically very low), but inflation is still above the Fed’s 2% target, and consumer spending remains strong. If the Fed cuts rates now, I think it’s going to push off the inflation target that much further. If they do cut rates, it will almost certainly be a very modest cut. The Fed can’t risk an inflation spike if rates are cut too much too quickly.