the staff of the Ridgewood blog
Ridgewood NJ, the Federal Reserve Chairman Jerome Powell confirmed a quarter-percentage-point rate cut, bringing the federal funds rate to a range of 4.5% to 4.75%. This is the second rate cut in recent months as the Fed aims to navigate a complex economic landscape. Another potential cut is on the table for December, depending on the economic climate as the year ends.
The timing of this meeting was significant, with the Fed delaying it by a day to avoid overlapping with Election Day. The move reflects the careful balance officials are trying to achieve: lowering rates enough to counter rising unemployment without reversing recent progress on inflation. While inflation has been cooling, rate-sensitive areas like mortgages and car loans have seen borrowing costs rise rather than fall since September’s cut—a trend tied to market dynamics and bond sell-offs.
Balancing Inflation and Employment
The Fed’s current strategy seeks to support employment without reigniting inflation. Higher borrowing costs in housing and auto loans—sectors particularly sensitive to rate changes—are complicating this effort. As market optimism has led to increased bond sell-offs, Treasury yields have risen, which in turn drives up mortgage rates. This challenge puts pressure on the Fed to strike the right rate balance, stimulating the job market without sparking an inflation resurgence.
Tariffs Add to Economic Uncertainty
Adding to the Fed’s considerations is a potential 10% universal tariff on imported goods, proposed by Donald Trump. Analysts and officials are debating its potential to drive inflation higher, which could complicate the Fed’s goal of keeping inflation steady.
The next few months will be critical as the Fed, markets, and policymakers assess the effectiveness of these rate cuts. With another meeting planned in December, all eyes will be on the data and the Fed’s strategy for managing inflation and employment going into 2025.
Federal Reserve issues FOMC statement:
For release at 2:00 p.m. EST
Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
In support of its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/2 to 4-3/4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Beth M. Hammack; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller.
For media inquiries, please email media@frb.gov or call 202-452-2955.
Follow the Ridgewood blog has a brand-new new X account, we tweet good sh$t
https://twitter.com/TRBNJNews
https://truthsocial.com/@theridgewoodblog
https://mewe.com/jamesfoytlin.74/posts
#follow #media #trending #viral #newsupdate #currentaffairs #BergenCountyNews #NJBreakingNews #NJHeadlines #NJTopStories,#NorthJersey, #NJ , #News, #localnews,