The Federal Reserve announced its second interest rate cut of the year on Wednesday, reducing the benchmark federal funds rate by a quarter of a percentage point to a range of 3.75% to 4%. This marks the lowest level in three years. The central bank cited slowing job gains and an increase in the unemployment rate, though it remained low through August. Additionally, inflation has risen this year and remains elevated.
The decision comes amid growing concerns about the state of the U.S. economy. Americans are experiencing tariff-related price hikes, surging health insurance premiums, and the ongoing effects of a government shutdown, including missed paychecks and reduced food assistance. Critics argue that these challenges reflect broader economic instability.
Economist Alex Jacquez, a former Obama administration official and current chief of policy and advocacy at the think tank Groundwork Collaborative, stated that the Fed’s move “does little to address” the economic turmoil linked to President Donald Trump’s policies. He emphasized that the economy is slowing, job growth has stalled, and consumers are struggling as prices continue to rise.
U.S. House Budget Committee Ranking Member Brendan Boyle (D-Pa.) echoed similar concerns, calling the rate cut “another warning sign about the sorry state of Donald Trump’s economy.” He pointed to nearly half of all states being in or near recession, rising inflation, and a weakening labor market, which he attributed directly to Trump’s economic policies, including his tariff taxes and “chaotic agenda.”
Boyle also highlighted the unprecedented spike in health insurance premiums, stressing the need for continued efforts to lower costs and ensure access to affordable healthcare and stable employment.
Rohit Chopra, who led the Consumer Financial Protection Bureau during the Biden administration before Trump’s policies weakened the agency, criticized the influence of Trump’s administration on the Federal Reserve. He noted that while Trump is not involved in setting interest rates, his policies continue to shape the central bank’s decisions. Chopra specifically mentioned Governor Lisa Cook, who is facing efforts to remove her from the Fed’s Board of Governors. Her legal team has called the attempt “unprecedented and illegal,” and the U.S. Supreme Court will hear arguments in her case in January. In the interim, the court has allowed her to remain in her position.
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