The Federal Reserve reduces interest rates for the first time this year with weak labor market

the Federal Reserve On Wednesday, it announced the reduction of the first interest rate for this year, as policy makers reduced the standard interest rate by 25 basis points, as the signs of the work of the workforce exceeded the high inflation.

Following the Central Bank’s decision to reduce prices for the first time since December 2024, the rate of federal funds will sit with a new range from 4 % to 4.25 %. This reduction comes after the Federal Reserve has left prices unchanged in its first five meetings this year amid economic uncertainty.

Politics makers were watching Economic data Which showed a slowdown in employment with companies struggle with transformations in the trade and immigration policy, while inflation has been high and headed in recent months while liquidating the high prices related to tariffs through inflation data.

This dynamic presented a challenge to policy makers in achieving both the double federal reserve delegations to enhance the maximum employment and stable prices in line with the goal of inflation by 2 % at the Federal Reserve.

The FOOC Open Market Committee (FOMC), which directs the monetary policy movements of the Central Bank, has noticed in its announcement that job gains have slowed and that the unemployment rate has risen but is still relatively low, while inflation has risen and is still somewhat high. FOMC added that when monitoring both the double mandate side, “the negative risks of employment have risen.”

The inflation remained stubbornly in August, where the Federal Reserve weighs discounts in interest rates

Only one policy maker, newly confirmed federal governor, Jeffrey Miran, opposed the FOMC 11-1 vote. Miran, who preferred to reduce 50 Basis at this meeting, replaced former Federal Reserve Governor Adriana Kogler, who resigned in August.

Federal Reserve Chairman Jerome Powell He previously said that if the indicators about inflation and the labor market are away from those goals, policy makers will focus on dealing with them, beyond the goal.

Powell began his press conference by saying that the Federal Reserve Bank focuses on both the double -mandate goals and indicated that recent economic developments have suggested a slowdown in growth.

“In general, the noticeable slowdown in both supply and demand for workers is unusual. In this less dynamic and more softer market, it seems that negative risks to employment have risen,” said Powell. “Inflation has dramatically from its highest level in mid -2012, but it is still somewhat high for our 2 % longer goal.”

Experts warn of the federal reserve “freezing” the American dream of “inefficiency”

Repeat the first High prices caused by customs tariffs It can be a single -time shift in the price level, but it can be a more stable inflation challenge. He explained that “the commitment of the Federal Reserve is to ensure that the increase in the price level does not become a problem with continuous inflation.”

“We have started to see the prices of goods appear through high inflation,” Powell said.

Powell said that the Federal Reserve believes that the upward trend in inflation will be an increase in prices for one time of definitions, but he said that the central bank cannot take this as a Muslim by it because it weighs monetary policy.

“We can only assume it,” he said. “Our mission is literally to make sure that this is what is happening, and we will do this job.”

Senate Stephen Miran confirms the Federal Reserve before the decisive price reduction meeting

Powell was asked about signs Definitions that cause inflation He noted that the enlargement of goods was negative in the past year, but it rose by 1.2 % during the past year, after the price of goods in general decreased for 25 years before the epidemic even after the modification of the quality of the product.

He added that the customs tariff contributes to something like 0.3 or 0.4 percentage points for reading the current basic inflation of PCE by 2.9 %.

“What seems is that the definitions are often not paid by exporters,” said Powell. “All of these companies and entities in the middle, they will tell you that they have every intention to pass it in time, but they don’t do it now. Consumer, The scrolling was very slow, it was slower and smaller than we thought. But the evidence is clear that there is some success. “

The President of the Federal Reserve was asked about the independence of the central bank, given the president Donald Trump The efforts made to influence the central bank’s decision, and how the public can guarantee the movements of criticism policy on economic conditions instead of political considerations.

“From the depth of our culture to do our work based on the data received and not anything else,” Paul said, adding that “you will know this the way we are talking about, through the speeches that people make, through the decisions we make.”

“We do not fly these questions at all, or see them in terms of political results. I think that when you reach another part of Washington, everything is seen through a lens, does it help or harm this political party.” “I think people find it difficult to believe that this is the way we think about things in the Federal Reserve. We take a longer perspective, trying to serve the American people as best we can.”

Decreased job growth in the United States during the month of March by 911K

Edward Lawrence, “Fox Business” Powell, asked about the initial review statistics office, which showed that the labor market added 911,000 jobs less than reporting from April 2024 to March 2025 and how federal reserve rules decisions on these data.

Powell said, “It was surprising how close to expect, and the reason for this was for the last group of quarters, there was a group of factors that could almost be predicted, and I think the work statistics office really understood this, and they are working hard to fix it,” Powell said.

Lawrence asked if this would change the former Federal Reserve decisions to leave the prices unchanged, and Powell replied, “We have to live life in looking at the windshield, instead of the back vision mirror, as you know. All I can say is that we see where we are now, and we take an appropriate action, and we took this appropriate action today.”

The issues of the world leader, Trump, warn of the independence of the Federal Reserve

The Federal Reserve was subjected to pressure from the Trump administration to reduce interest rates, as the president has repeatedly threatened to shoot Powell – although he has since declined these threats with the president’s term due to the expiration of its validity in May 2026.

Powell was asked whether he intends to leave the federal reserve after his term when a chair ends instead of staying as a ruler in the Federal Reserve, where this term continues until 2028, although he refused to comment.

Trump is also trying to shoot the ruler Lisa Cook On allegations of mortgage fraud, although the provincial court ruling, which was temporarily prevented, was supported by an appeals court and allowed her to participate in the FOMC meeting this week.

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Cook has not been accused of any crimes related to the allegations raised by Trump’s ally and director of FHFA Bill Bouti. Powell refused to comment on the case that involves Trump’s efforts to launch Cook.