Fed's Jerome Powell pushes for half-point interest rate cut

Chair Jerome Powell's push for a half-point interest rate cut was supported by all but one of the 12 voting members of the Federal Open Market Committee. This decision followed weak job data and inflation reports indicating easing price pressures, which led Powell to believe a significant cut was necessary to protect the labor market. He described the cut as a 'good strong start' from both an economic and risk management perspective. Economists suggest that if labor market conditions worsen, another half-point cut could be on the table, reflecting Powell's commitment to maintaining near-full employment while managing inflation. Powell's leadership has been evident in key moments over the past year, including signaling a potential peak in rates and holding rates steady during inflation fluctuations. His approach has been guided by the belief that high interest rates can cool the economy without severely impacting jobs. The decision to cut rates was also seen as a confidence boost that inflation could return to the target of 2%. Discussions leading up to the meeting were intense, with a lively debate among Fed officials about the appropriate course of action, highlighting Powell's ability to foster communication and coordination among his colleagues. The overall stance of monetary policy remains tight, even after the cut, indicating that the Fed is still cautious about the economic outlook.