Fed Eyes Rate Cut in Final Decision of 2025 скачать в хорошем качестве

Fed Eyes Rate Cut in Final Decision of 2025

Tiffany Wilding, Economist at PIMCO, previews today's Fed decision. Determining interest rates involves a tough balancing act for the Federal Reserve, which aims to deliver price stability and full employment. Drastic policy shifts by the Trump administration in trade and immigration have brought the two sides of the central bank’s mandate into conflict. There are divisions over which of the two goals is more important right now among Fed policymakers, who are due to announce a decision on their benchmark interest rate on Dec. 10 after announcing two cuts in a row, in September and October. What is the Fed’s balancing act?  Since 1977, Congress has given the Fed a dual mandate: promote both stable prices and maximum employment to help ensure a strong economy. Typically, when prices are rising, the Fed raises rates to ward off further inflation. When joblessness increases, the Fed cuts rates to lower borrowing costs and spur hiring.  But in the last year, the US labor market has softened at the same time that inflation has remained elevated, in what is partly a hangover from the rapid price increases during the pandemic. President Donald Trump’s imposition of tariffs on a vast swath of imports threatens to push prices higher still. That has left the Fed in a difficult position, aware that lowering rates too much or too fast could fuel further price increases while holding rates steady could drive unemployment higher. What are the Fed’s goals? Fed policymakers have never set a precise target for the unemployment rate, arguing that the lowest sustainable level for joblessness can only be estimated and changes over time. Currently, the Fed judges that level to be around 4.2%. Much lower and the economy could face worker shortages and rising prices.  Price stability has been a matter of more extensive private and public debate. After battling the inflation spike of the 1970s, former Fed Chair Paul Volcker used to say that the right level of inflation was almost none at all. Janet Yellen, who during her many years at the Fed pushed her peers there for clarity on the meaning of price stability, argued the central bank should tolerate modest price increases to support wages and underpin the job market. The Fed adopted the 2% inflation target in January 2012, a goal that it has stuck with since. -------- Watch Bloomberg Radio LIVE on YouTube Weekdays 7am-6pm ET WATCH HERE: http://bit.ly/3vTiACF Follow us on X:   / bloombergradio   Subscribe to our Podcasts: Bloomberg Daybreak: http://bit.ly/3DWYoAN Bloomberg Surveillance: http://bit.ly/3OPtReI Bloomberg Intelligence: http://bit.ly/3YrBfOi Balance of Power: http://bit.ly/3OO8eLC Bloomberg Businessweek: http://bit.ly/3IPl60i Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts:    / bloombergpodcasts   Bloomberg Television:    / @markets   Bloomberg Originals:    / bloomberg   Quicktake:    / @bloombergquicktake