Fed cuts interest rates again as economic concerns persist

By Steve Kopack

The Federal Reserve on Wednesday cut its influential interest rate for the third time this year as it tries to balance rising inflation with a labor market that appears to have weakened in recent months.

The move could provide a boost to the U.S. economy, but Fed Chair Jerome Powell has recently warned that there is no risk-free path for the central bank to take.

The cut of a quarter point — a cautious interest rate move by the Fed — could make it cheaper for average Americans who hold a mortgage, have credit card debt or need to take out or refinance a personal loan. It would also help businesses borrow at lower rates.

The cut had been anticipated by investors, but some doubt remained after some members of the Fed’s committee expressed ongoing concerns that lower interest rates could push consumer prices higher.

Affordability has remained a major issue across the U.S., with President Donald Trump — who has repeatedly and vociferously called for the Fed to continue to cut interest rates — recently downplaying those concerns after having campaigned on them.

Doubt about the overall economic picture lingers thanks in part to the fog of a data blackout, the result of the prolonged federal government shutdown this fall. Meanwhile, alternative data has consistently pointed to a slowing labor market. The payroll processor ADP’s most recent monthly private jobs report showed small businesses having shed a whopping 120,000 jobs in November.