Jerome Powell is expected to leave by May next year, which will close out almost twelve years in that position. Interest rates usually come down when job growth weakens, and they go up when inflation gets too strong. Economists see both weak employment and rising prices as real threats, so the current moment is complicated.
There is also a wave of major layoffs across tech and other industries. Part of it is because companies are cutting costs through artificial intelligence, and part of it is because everyone is chasing the next big AI venture. On top of that, the recent FOMC meeting happened without fresh job reports or inflation data because of the shutdown, which means the committee was making decisions with limited information.
A newer recession signal is also showing up. Motor vehicle sales have dropped sharply, and if you look at long term charts, this pattern only appears during recessions. The red arrows on those charts mark every time this happened before.
Even though the Fed cut rates today, there were three dissents. That is rare. Some members wanted to keep rates flat or even raise them because they still see inflation as a problem. This shows that there is real disagreement inside the Fed right now.
Powell said inflation is not high enough to stop wages from keeping up, but recent surveys do not support that. Many people say they are feeling the pressure.
Some of the points are from Big A youtube channel.
Part 2: https://www.publish0x.com/market-news/we-are-so-back-part-2-xokzzmw
