""Job gains have slowed this year, and the unemployment rate has edged up but remained low through August," the Fed said in a statement issued Wednesday. "More recent indicators are consistent with these developments." The government hasn't issued unemployment data after August because of the shutdown. The Fed is watching private-sector figures instead. Wednesday's decision brings the Fed's key rate down to about 3.9%, from about 4.1%."
"The move comes amid a fraught time for the central bank, with hiring sluggish yet inflation stuck above the Fed's 2% target. Compounding its challenges, the central bank is navigating without the economic signposts it typically relies on from the government, including monthly reports on jobs, inflation, and consumer spending, which have been suspended because of the government shutdown. The Fed has signaled it may reduce its key rate again in December, but the data drought raises the uncertainty around its next moves."
The Federal Reserve cut its key interest rate to about 3.9% from roughly 4.1% to support economic growth and hiring. Job gains have slowed this year and the unemployment rate edged up but remained low through August. The Fed is relying on private-sector indicators because government data releases are suspended due to the shutdown. The central bank previously raised rates to about 5.3% in 2023 and 2024 to fight high inflation. The Fed faces a tension between lowering rates to support jobs and keeping them high enough to prevent rekindling inflation. Officials signaled possible further easing in December amid uncertainty.
Read at Fast Company
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