•Press Release Federal Reserve Inflation
Today, the Federal Reserve made its highly anticipated decision to lower benchmark interest rates.
In response to this news, Center for Economic and Policy Research (CEPR) Senior Economist Dean Baker released the following statement:
“It’s good to see the Fed finally change course and start lowering rates. This is a belated recognition that the battle against inflation has been won. Contrary to the predictions of almost all economists, including those at the Fed, this victory was won without a major uptick in unemployment.
“Unfortunately, the Fed waited too long to make this turn. As a result, the unemployment rate has drifted higher. While there is little basis for concerns about a recession, if the unemployment rate is 0.5 percentage points higher than it needs to be, that translates into 800,000 people out of work who want jobs.
“It is good that the Fed has now recognized the weakening of the labor market and responded with an aggressive cut. Given there is almost no risk of rekindling inflation, the greater boost to the labor market is largely costless. Also, it will help to spur the housing market where millions of people have put off selling homes because of high mortgage rates.”
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