Fed chair Jerome Powell is delivering remarks right now about the half-point rate cut.Powell suggests, essentially, that the Fed is working toward a so-called “soft-landing” – bringing inflation down without hurting the jobs market.“This decision reflects our growing confidence that within appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2,%” Powell said.Powell said that the labor market has “cooled from its formerly overheated state” and inflation has “eased substantially” – a marked difference in tone from press conferences over the last year, where Powell mostly spoke on concerns about price increases.Here’s a quick summary of what happened today:The US Federal Reserve cut interest rates by a sizeable half-point, the first cut since rates hit zero in 2020.

Though there was much anticipation for the cut, Wall Street opened with a shrug toward the upcoming announcement, staying relatively flat on Wednesday.Fed chair Jerome Powell, in remarks after the announcement, said that the cut marks the start of a “recalibration” of Fed policy.For the last two years, the central bank has been focused on price increases.Now, Fed officials see inflation has stabilized and are paying close to the unemployment rate, which has increased over the last few months.Powell also responded to criticisms that the rate cut seems politically motivated since it’s happening so close to the election.

Donald Trump in particular has suggested that the Fed is politically motivated and that he would want a stronger say in interest rates as president.“We’re going into this meeting in particular and asking what is the right thing to do for the people we serve,” Powell said.“That’s always what it is, it’s never about anything else”.Powell also said the likelihood of a recession from his standpoint is low.“I don’t see anything in the economy that suggests the likelihood of a downturn is elevated,” he said.

We’re closing this blog for the day.Thanks for reading.Fed chair Jerome Powell just wrapped up the press conference by saying that he sees inflation well-balanced with the labor market right now and the possibility of a recession is low.“I don’t see anything in the economy that suggests the likelihood of a downturn is elevated.I don’t see that,” Powell said.

“You see growth at a solid rate.You see inflation coming down and see a labor market that is still at very solid levels.So I don’t really see that, no.”Powell responded to a question about accusations that an interest rate two months before the election as political motivations, something that Donald Trump has suggested over the last few months.“This is my fourth presidential election at the Fed and it’s always the same.

We’re going into this meeting in particular and asking what the right thing to do for the people we serve.And we do that and we make a decision as a group and then we announce it.That’s always what it is, it is never about anything else,” Powell said.He also noted that “the things that we do really affect economic conditions, for the most part, with a lag.”In other words, much of the impacts of this rate cut won’t even be felt until after the election.

Powell is fielding multiple questions about the labor market.One reporter asked why why the Fed thinks the labor market will stabilize around 4.4% when historically, the unemployment rate continues to rise if it goes up at that pace.“The labor market is in solid condition and our intention with our policy today is to keep it there.You can say that with the whole economy.

The US economy is in a good shape,It’s growing at a solid pace, inflation is coming down, the labor market is at a strong place,We want to keep it there,That’s what we’re doing,” he said,Another reporter asked if Fed officials were too late in cutting rates with rising layoffs.

Powell ended up taking a defensive stance, saying that officials are seeing a strong labor market that has cooled from an overheated period,“The level of conditions is pretty close to what I would call maximum employment,” Powell said,“We’re not seeing rising claims, we’re not seeing rising layoffs and we’re not hearing that from companies,”When asked whether it seems like there will be another rate cut in the future, Fed chair Jerome Powell said a pretty standard response: “We’re going to be making decision meeting by meeting based on the incoming data, the evolving outlook and the balance of risks,”But Powell pointed out that the Fed’s economic projections after this meeting point to a “process of recalibrating our policy stance away from where we had it a year ago when inflation was high, unemployment low, to a place that’s more appropriate,” he said.

“There’s nothing to suggest the committee is in a rush,” he added, suggesting officials are still taking a cautious approach,Powell also noted that all 19 Fed officials behind the Fed’s economic projections indicated they expect there to be multiple rate cuts this year,Fed chair Jerome Powell confirmed that the Fed has been attuned to changes in the labor market seen over the last few months,Unemployment went above 4% this summer for the first time in two years and is currently sitting at 4,2%.

Inflation meanwhile was 2,5% in August,“Our primary focus had been on bringing down inflation and appropriately so,” Powell said,“As inflation has declined and the labor market has cooled, the upside risks to inflation have diminished and the downside risks to unemployment have increased,We now see the risks to achieving our employment and inflation goals as roughly in balance, and we are attentive to the risks to both sides of our dual mandate.

”Fed chair Jerome Powell is delivering remarks right now about the half-point rate cut.Powell suggests, essentially, that the Fed is working toward a so-called “soft-landing” – bringing inflation down without hurting the jobs market.“This decision reflects our growing confidence that within appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2,%” Powell said.Powell said that the labor market has “cooled from its formerly overheated state” and inflation has “eased substantially” – a marked difference in tone from press conferences over the last year, where Powell mostly spoke on concerns about price increases.The Fed’s so-called “dot plot”, which shows Fed officials’ predictions on where they think the interest rate will end up in the long run.

The new dot plot, released with the Fed’s rate cut announcement, shows the predictions average at rates going down to 4.25% to 4.5% by the end of the year, showing that while there may be more rate cuts to come this year, some officials may be skeptical of a succession of cuts of large cuts.JUST IN: Federal Reserve cuts interest rates 50 bps, the first rate cut since 2020.The new interest rate target is 4.

75 to 5%.—>The “dot plot” signals interest rate down to 4.25 to 4.5% by the end of the yearVote today was 11 in favor and 1 against pic.twitter.

com/YySCvkfvklThe Fed has two meetings before the end of the year – one in November and a second in December.The Federal Reserve just announced that it’s cutting rates by a half-point, bringing rates down to 4.75% to 5%.“The committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Fed’s Open Market Committee said in a statement.This is the first time the Fed has cut rates since the start of the pandemic, when it dropped rates to zero.

Fed chair is expected to hold a press conference about the rate cut at 2:30 pm ET.Stay tuned.It’s hard to ignore the fact that the first interest rate cut is taking place less than two months before the US presidential election, especially if you’re Donald Trump.Trump has been struggling to frame the upcoming rate cuts, sometimes railing against the Fed and suggesting that the central bank is politically motivated.At a town hall in Flint, Michigan on Tuesday night, Trump said that a rate cut would mean “the economy now is not good”.

“Otherwise, you wouldn’t be able to do it,” Trump said.The Fed of course operates independently from politics.Trump appointed Jerome Powell in 2017, and Biden re-nominated him again in 2021.It uses data, largely around inflation and the jobs market, to decide whether to tighten or loosen rates.But for Trump, that might not be enough.

Trump in August said that he thinks the president should have a say in interest rates, and while he wouldn’t fire Powell, he wouldn’t reappoint him.“I think that, in my case, I made a lot of money.I was very successful,” Trump said in August.“And I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman.”Trump’s response to today’s rate cut will likely give another clue as to how he’s viewing the Fed, as more foe than friend.

A Harris poll for The Guardian earlier this year – which found almost three in five Americans wrongly believed the US was in recession – underlined the gap between how the world’s largest economy is doing, and how people think it’s doing,“If you stopped the average person in the street, they would have no idea” how many jobs had been created, or how many people were out of work, in any given month, Stephanie Kelton, a professor of economics and public policy at Stony Brook University, noted recently,Ahead of the US presidential election, voters consistently rank the economy as a top issue,But even those who do follow the latest official data reports are unlikely to base their decision in November on their contents,An interest rate cut might be different.

“Perhaps at the margin, in the tiniest of ways”, it could make some people start to feel better about the economy, Kelton suggested,“Maybe there’s a little bit of a vibe shift in having the rate-cutting cycle begin, and knowing it’s under way,”The most recent official inflation and employment releases broadly reinforced confidence that the Fed would cut rates today,The latest consumer price index, released last week, showed that price growth softened in August to its lowest level since February 2021,The latest jobs report underlined how the labor market’s growth has slowed this year, 142,000 jobs in August.

Policymakers will have carefully scrutinized both these reports ahead of the decision,Ahead of the Fed’s announcement, it’s worth noting why Wall Street is so confident that this time around – having kept rates on hold at the past eight consecutive meetings – it will finally act,Jerome Powell, the central bank’s chair, all but declared last month it would cut rates when policymakers convened for their September meeting,“The time has come for policy to adjust,” he told an annual symposium for central bankers at Jackson Hole in Wyoming,While Powell added that the “timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks”, he said: “The direction of travel is clear.

”Many investors have heard enough,Money markets currently put the chances of a 50 basis-point cut at 55%, according to CME’s FedWatch tool,