Why Rate Cuts Could Be the Right Move 1. Labor Market Is Weakening—Supports Easing Two Federal Reserve officials, Governor Christopher Waller and Vice Chair Michelle Bowman, recently dissented against keeping rates steady, advocating for a 25 basis-point rate cut. Their concerns? A softening U.S. labor market and slowing economic growth. In their view, current rates are well above neutral and risk further weakening employment conditions. Investors+15Business Insider+15ING Think+15 2. Market & Treasury Signal Near-Certain Cuts Following moderate inflation data and soft employment figures, markets now assign nearly a 100% probability of a Fed rate cut in September. Treasury Secretary Scott Bessent even suggested the Fed could cut as much as 175 basis points, framing the current rates as overly restrictive. Reuters+1 3. Historical Lessons & Fed Independence Fed Chair Powell is under pressure—but that’s no reason to delay. Historically, the Fed's independence has been critical to delivering long-term economic stability, even when its decisions were unpopular. Roosevelt Institute+15apnews.com+15savvywealth.com+15 Summary Table: Original Argument vs. Counterargument Original Claim Counterpoint Rate cuts would fuel asset bubbles and stunt affordability for ordinary people. Policymakers like Waller and Bowman argue cuts are needed precisely because the labor market is weakening—not booming—and cooling will ease burdens. Lowering rates now would further fuel inflation, as CPI and PPI continue rising. Market expectations and Treasury signals reflect confidence that controlled, timely rate cuts can sustain stability while supporting growth. Fed shouldn’t respond to political pressure—just stand back and let markets set rates. The Fed has a mandate to balance inflation and employment—strategic cutting may be necessary to prevent recession and protect employment gains. “Doing nothing” is better than loosening into inflation. Inaction risks deeper job losses and higher borrowing costs. Timely easing may be essential for a soft landing rather than a hard one. Bottom Line Labor data and dissenting Fed voices support easing. Market signals and Treasury input reinforce that tightening may already be excessive. Respect for Fed independence argues for measured action—guided by data, not politics.
so glad well all knew that news before the price jumped. isn't the news just great everyone should worship the news for trading advice.
Fed rate cut - great to hear, but… J.P. will go slow 25 points to reduce, but it won’t changes much. What we see now it’s short time markets reaction. CPI index has 40% impact from the factor as housing component. Do you think 25 points will make a big improvement ? We need 100 points to improve housing and therefore to shrink inflation ! J.P. will be late as he always does. But it’s still better than nothing.
Why do we need a rate cut with inflation running at 0.9% MoM? Huh. The Trump economy not booming? Perish the thought. Yo-semite guy can't read Jack and Jill but he says that Rates should be at 0.
To treat it as political issue is a BIG mistake. It is economy ! I am kind of agree - for J.P. to make 25 points cut is not smart. In my opinion, he should do 50 and next step 50 points cut to improve housing factor ! Let say as sample 3.5% inflation. Reducing housing factor from 40% impact to 10% will reduce inflation 3.5*.7=2.45. Speed up housing will improve economy as well. And this is not 0%. This should work.