Make Me Smart Let's check in with the Fed
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Jul 31, 2025 Nancy Marshall-Genzer, Marketplace’s correspondent in Washington, D.C., dives into the Federal Reserve's decision to maintain interest rates amidst political pressures from President Trump. The discussion explores the internal dissent at the Fed and the broader implications of these monetary policies. Tension and historical governance challenges surrounding the Fed's role in the economy are highlighted. Plus, listeners hear delightful anecdotes about the joys and frustrations of gardening, emphasizing patience and reward in both nature and finance.
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Fed's Inflation Target Focus
- Jerome Powell stressed that inflation is not yet at the Fed's 2% target, currently around 2.7%. - The Fed wants to be sure inflation is heading back to 2% before cutting interest rates.
Rare Fed Dissent Occurs
- Two Fed governors, Michelle Bowman and Christopher Waller, dissented wanting a rate cut. - This level of dissent hasn't happened since 1993, showing unusual Fed division.
Tariffs Create Fed Dilemma
- The Fed is torn between risks from tariffs causing layoffs versus tariffs pushing inflation up. - This tug between employment and inflation mandates causes differing views on rate cuts.