Make Me Smart Why the Fed cut interest rates
Dec 11, 2025
Nancy Marshall-Genzer, a Marketplace correspondent with expertise in Federal Reserve coverage, dives into the recent interest rate cut by the Fed. She explores the internal debates among Fed members about inflation and jobs and the implications of incomplete data on decision-making. Nancy also discusses President Trump's influence on Fed leadership choices, the potential successors, and what the rate cut means for consumers, from credit cards to refinancing risks. It's a fascinating look at the intersection of economics and politics.
AI Snips
Chapters
Transcript
Episode notes
Fed Split Over Uncertain Data
- Fed officials were deeply divided because economic data is uncertain and could justify either more cuts or holding steady.
- Powell described decision-making as "driving in the fog," reflecting large real-time data limitations.
Small Cut, Big Pause Signal
- The Fed cut rates 25 basis points as a cautious middle ground after three cuts this year totaling 175 basis points.
- Officials project only one rate cut next year and signaled they can pause to watch how the economy evolves.
Chair Has Voice, Not Veto
- The Fed chair shapes tone but only has one vote among 12 FOMC members, so the chair's power to change policy is limited.
- Replacing Powell matters more for rhetoric and influence than unilateral control of rates.