Fed Cuts Rates Under Pressure
The Federal Reserve made its first rate cut of Donald Trump’s second term — just a quarter point, but politically potent. Trump had spent months hammering Jerome Powell over high rates, and the new board member, Trump-aligned Stephen Mirren, dissented on the grounds that the cut wasn’t big enough. While Powell maintained the independence of the Fed, the optics say otherwise. Trump wanted cuts, and he got them.
The political context here is more than a little charged. Powell and Biden’s earlier insistence that inflation was transient doesn’t look great as prices tick back up. Combine that with weak job numbers, and the Fed was left in a corner. The worst-case scenario is stagflation — rising prices with sluggish hiring — and this move seems aimed at keeping that from becoming the headline.
