Less than a year ago, the Federal Reserve took decisive action to bolster the U.S. economy. With inflation easing and the labor market starting to soften, the central bank opted to go big, lowering interest rates by half a percentage point and signaling further cuts to come. Rather than a panicky response to a crisis situation, the decision amounted to the Fed taking out some insurance to protect the labor market from weakening too much. In a barrage of attacks on the central bank recently, President Trump called on Jerome H. Powell, the chair, to lower borrowing costs in a similar fashion to prevent the economy from slowing down. But the Fed no longer has the flexibility to move pre-emptively.
Source: NYT > Business
