The Federal Reserve approved a quarter-point interest rate cut Wednesday, the first in nine months, with officials judging that recent labor-market softness outweighed setbacks on inflation.
A narrow majority of officials penciled in at least two additional cuts this year, implying consecutive moves at the Fed’s two remaining meetings in October and December. The projections hint at a broader shift toward concern about cracks forming in the job market in an environment complicated by major policy shifts that have made the economy harder to read.
A narrow majority of officials penciled in at least two additional cuts this year, implying consecutive moves at the Fed’s two remaining meetings in October and December. The projections hint at a broader shift toward concern about cracks forming in the job market in an environment complicated by major policy shifts that have made the economy harder to read.
The Fed’s carefully drafted post-meeting statement pointed to those concerns when it said the rate cut was justified “in light of the shift in the balance of risks.” The statement no longer described the labor market as “solid.” Officials also removed a key phrase that had been used this year to tamp down expectations of rate cuts, further underscoring how reductions at upcoming and consecutive policy meetings have become more likely.