The Journal. The Drama at the Fed as It Debates Cutting Rates
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Sep 16, 2025 
Join WSJ reporter Nick Timiraos as he reveals the high-stakes drama at the Federal Reserve. He discusses the pivotal decision on whether to cut interest rates to stimulate a cooling labor market or to prioritize inflation control. Timiraos dives into the tension between economic pressures and political influences, particularly from the Trump administration. He also highlights concerns about Fed independence amidst political maneuvering and the significance of dissent among governors during this critical transition.
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Fed's Trade-Off Like A Penalty Kick
- The Fed faces a binary trade-off between fighting inflation and supporting the labor market.
- Choosing one often worsens the other because rate moves stimulate or slow demand.
Policy Experiments Are Muddying Signals
- U.S. policy moves (deportations, tariffs) are simultaneously squeezing labor supply and raising costs.
- Those competing forces complicate the Fed's decision over whether to cut or hold rates.
Labor Market Cooling, Not Collapsing—Yet
- The labor market is slowing but hasn't shown widespread layoffs yet, though jobless claims ticked up in early September.
- Continued claims increases would signal a shift toward firing rather than merely hiring freezes.