Staff Reports
The Federal Reserve has once again flexed its monetary muscles, this time with a quarter-point drop in interest rates. This marks the third and final cut for the year, sending a clear signal that the central bank is desperately trying to keep this wobbly economy on its feet. With forecasts hinting at even more cuts in the year ahead, it’s evident that the Fed is reacting to the economic chaos that has developed under the current administration.
In its recent announcement, the Fed adjusted the target range for the federal funds rate down to between 4.25% and 4.50%. It seems they are putting a positive spin on things by stating their mission to foster maximum employment and control inflation, which has been spiraling out of control. Yet, for many Americans, this feels less like a thoughtful strategy and more like a reaction to a severe economic hangover.
The Federal Reserve announced its third consecutive interest rate cut this year. CBS News business analyst Jill Schlesinger explains what the Fed's decision tells us about our economy.
"The Fed believes that the economy is strong, but not so strong that reducing rates again… pic.twitter.com/ePYKXSldid
— CBS News (@CBSNews) December 18, 2024
The reaction from business leaders is a mixed bag. Alfredo Ortiz, the CEO of Job Creators Network, shared the sentiments echoing the frustrations of small businesses across the nation. While a rate cut could provide slight relief in borrowing costs, small business owners are still grappling with the harsh realities of soaring inflation, a problem that has become nearly synonymous with the Biden administration. The Fed may be fiddling with interest rates, but the bigger issue remains—the costs of doing business are rising faster than the speed limit on a country road.
It’s hard to ignore the staggering statistic that inflation has soared a staggering 21% since President Biden took the reins. During Trump’s presidency, America was enjoying economic stability and low inflation rates that seemed to please even the pickiest economists. In stark contrast, the Bidenomics approach has left Americans feeling like they are in a never-ending rollercoaster of price hikes at every turn, from groceries to gas stations.
Ortiz emphasized the necessity for the Fed to refrain from further cuts until there is a clear sign that inflation—that pesky beast—is under control and consistent with their own 2% target. Unfortunately, at the pace inflation is going, that 2% target may as well be written in invisible ink.
So, what’s next? The Fed will continue its tightrope walk of balancing rate adjustments while inflation looms large, like an unwelcome guest at a party. As they assess incoming data and balance risks, conservative critics can’t help but wonder if they are simply chasing their tails in an effort to bail out a sinking ship. The economic landscape is as turbulent as a summer thunderstorm, and with the current policies in place, the outlook isn’t looking any more stable for everyday Americans.
