{"id":2343714,"date":"2024-09-20T05:24:02","date_gmt":"2024-09-20T09:24:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-chairman-tries-to-appease-dc-and-wall-street-with-rate-cut-washington-examiner\/"},"modified":"2024-09-20T05:26:06","modified_gmt":"2024-09-20T09:26:06","slug":"fed-chairman-tries-to-appease-dc-and-wall-street-with-rate-cut-washington-examiner","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-chairman-tries-to-appease-dc-and-wall-street-with-rate-cut-washington-examiner\/","title":{"rendered":"Fed chairman tries to appease DC and Wall Street with rate cut &#8211; Washington Examiner"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">30<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffed-chairman-tries-to-appease-dc-and-wall-street-with-rate-cut-washington-examiner%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2343714&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The article discusses the recent decision by the Federal Reserve to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/breitbart-business-daily-the-rumble-and-the-ruble-how-the-wests-sanctions-on-russia-strengthen-the-ruble-and-threaten-globalization\/\" title=\"Breitbart Business Daily: The Rumble and the Ruble\u2014How the West\u2019s Sanctions on Russia Strengthen the Ruble and Threaten Globalization\">cut interest rates<\/a> by half a percentage point, marking its first rate cut since the COVID-19 pandemic began. \u200cThis \u2062move, made on September 18, was more aggressive than many investors anticipated and was seen positively in the\u200b equities markets. <\/p>\n<p>Chairman Jerome Powell and other Fed officials have maintained a consistent stance despite pressures from Wall Street and Washington, effectively signaling an end to the strict monetary policies that have been in place over the past\u200c two years. While the Fed has projected further gradual rate cuts in 2024, it is \u200cclear that its actions aim for <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/nascar-teams-call-revenue-model-broken\/\" title=\"NASCAR Teams Call Revenue Model &quot;Broken&quot;\">long-term stability<\/a> rather than immediate market rescue.<\/p>\n<p>The article underscores that many Fed voting members expect only a modest number of cuts, with long-run interest rates stabilizing significantly higher than during the preceding zero-interest-rate policy era. \u2063The Fed also plans to continue reducing its balance sheet, indicating that quantitative tightening will persist and a return to\u2062 a zero-interest policy is unlikely.<\/p>\n<p>As the political landscape begins to react to these monetary policies ahead of the 2024 elections, the Fed&#8217;s measured approach makes it difficult for either political party to claim undue influence over the economic conditions leading up to the election.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<p><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><\/p>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-header-search-button-mob dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-mobile-search-icon td-icon-search\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div class=\"tdb-drop-down-search\" aria-labelledby=\"td-header-search-button\">\n<div class=\"tdb-drop-down-search-inner\">\n<form method=\"get\" class=\"tdb-search-form\" action=\"https:\/\/www.washingtonexaminer.com\/\"><\/form>\n<div class=\"tdb-aj-search\"><\/div>\n<\/div>\n<\/div>\n<p><a href=\"http:\/\/www.washingtonexaminer.com\/#\" role=\"button\" aria-label=\"Search\" class=\"tdb-head-search-btn dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-search-icon td-icon-search\"><\/i><\/a><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div class=\"tdb-sacff-txt\">Magazine &#8211; Business<\/div>\n<\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<h1 class=\"tdb-title-text\">Federal Reserve chairman tries to appease DC and Wall Street with interest rate cut<\/h1>\n<div><\/div>\n<div class=\"tdb-title-line\"><\/div>\n<\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div id=\"Brid_1736836\" class=\"tpd-featured-video bridtv\"><\/div>\n<p>After an all-out fight against <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/inflation\/\" target=\"_blank\" rel=\"noopener\" title>inflation<\/a> over the past two years, the <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/federal-reserve\/\" target=\"_blank\" rel=\"noopener\" title>Federal Reserve<\/a> recently voted to <a href=\"https:\/\/www.washingtonexaminer.com\/policy\/finance-and-economy\/3158342\/fed-opts-for-bigger-interest-rate-cut-in-first-downward-revision-since-pandemic\/\" target=\"_blank\" rel=\"noopener\" title><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-to-stop-inflation-from-hurting-americas-working-and-middle-class\/\" title=\"How To Stop Inflation From Hurting America\u2019s Working And Middle Class\">lower interest rates<\/a><\/a> by a half percentage point. The Sept. 18 move by the central bank <a href=\"https:\/\/www.washingtonexaminer.com\/news\/3158440\/federal-reserve-chair-press-conference-interest-rate-cut\/\" target=\"_blank\" rel=\"noopener\" title>was bolder<\/a> than many investors expected.<\/p>\n<div class=\"article-paywall\">\n<p>The Fed&rsquo;s <a href=\"https:\/\/www.washingtonexaminer.com\/news\/campaigns\/presidential\/3157651\/fed-rate-cut-boost-kamala-harris-campaign\/\" target=\"_blank\" rel=\"noopener\" title>first rate cut<\/a> since the world collapsed in March 2020 amid the COVID-19 pandemic outbreak drew elation in equities markets. Investors welcomed the supersize rate cut as evidence that the aberration of the last two years of restrictive monetary policy is over.<\/p>\n<p>But reading between the lines, Fed Chairman <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/jerome-powell\/\" target=\"_blank\" rel=\"noopener\" title>Jerome Powell<\/a> and his peers are not imposing some emergency effort to save markets from themselves. In fact, in the yearslong standoff between the Fed and an investor class addicted to the easy money of the 2008-2022 era, the Fed has quietly won its war. It&rsquo;s done so mostly by ignoring the demands of both Wall Street and Washington, D.C., to forge forward on almost exactly this path a little less than one year ago.<\/p>\n<p>At its final meeting of 2023, the Fed predicted that it would <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/interest-rates\/\" target=\"_blank\" rel=\"noopener\" title>cut rates three times<\/a> for a total of 75 basis points, but investors telegraphed more than twice as many cuts beginning in the first quarter of 2024. In reality, the Fed has hewed narrowly to what it said it would do all along. Although the central bank will score the inflation reduction headlines it so desperately wants, it&rsquo;s once again quietly urging caution.<\/p>\n<p>September&rsquo;s Summary of Economic Projections shows that still nearly half of the Fed&rsquo;s voting members believe it will only cut rates once more this year, bringing the total 2024 cuts to 75 basis points, exactly what it predicted late last year. Though a narrow majority says it will cut twice more, the SEP predicts a median interest rate of 3.4% by the end of 2025, close to the 3.6% of the final 2023 SEP projected for the end of 2025.<\/p>\n<p>The Fed has also remained precise and constant in its prediction that long-run interest rates will even out at 2.9%, far from the zero-bound once assumed as the default neutral interest rate. Powell reiterated as much during his postmeeting press conference, agreeing that &ldquo;the neutral rate is probably significantly higher than it was back&rdquo; during the Zero Interest-Rate Policy era.<\/p>\n<p>Most importantly, the Fed isn&rsquo;t done. Even beyond Powell&rsquo;s usual caveats that the Fed remains data-dependent and committed to inflation falling below its 2% target in the long run, the central bank also promised to continue to undo its balance sheet, &ldquo;reducing its holdings of Treasury securities and agency debt and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/as-high-inflation-persists-federal-reserve-unveils-first-official-plan-to-roll-back-stimulus\/\" title=\"As High Inflation Persists, Federal Reserve Unveils First Official Plan To Roll Back Stimulus\">agency mortgage-backed securities<\/a>.&rdquo;<\/p>\n<p>In other words, quantitative tightening is far from over, and even when it is, a return to ZIRP seems highly unlikely.<\/p>\n<p>And while already politicos on both sides of the aisle have been jockeying to spin the Fed&rsquo;s decision for maximum partisan advantage, the Fed has stuck so closely to the script that it&rsquo;s difficult to imagine either side succeeding in claiming that monetary policy has rigged the 2024 election. By the time Powell announced the September rate cut, let alone, by the time it even trickled down to reduced credit card APRs and mortgage rates, early voting had already begun in lynchpin swing states such as Pennsylvania, with five more states commencing before the month&rsquo;s end.<\/p>\n<p><strong><a href=\"https:\/\/www.washingtonexaminer.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><\/strong><\/p>\n<p>It&rsquo;s not the Fed has played its part perfectly. Far from it &mdash; the Fed&rsquo;s complicity in financing the bipartisan coronavirus spending spree in 2020 and then its refusal to cut off President <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/joe-biden\/\" target=\"_blank\" rel=\"noopener\" title>Joe Biden<\/a> and Vice President <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/kamala-harris\/\" target=\"_blank\" rel=\"noopener\" title>Kamala Harris <\/a>in 2021 is why the economy suffered its worst inflationary crisis in 40 years in the first place.<\/p>\n<p>But by its narrow definition of success, the Fed might have pulled off the impossible, and by that, I don&rsquo;t mean balancing full employment with basic price stability. It&rsquo;s too soon to say that it has achieved a soft landing, but as far as evading blame from Washington, D.C., and Wall Street, Powell has gotten his greatest wish: insulting the Fed from the institutional blame game of 2024.<\/p>\n<\/div>\n<p> <script data-cfasync=\"false\" src=\"http:\/\/www.washingtonexaminer.com\/cdn-cgi\/scripts\/5c5dd728\/cloudflare-static\/email-decode.min.js\"><\/script><script>!function(){var g=window;g.googletag=g.googletag||{},g.googletag.cmd=g.googletag.cmd||[],g.googletag.cmd.push(function(){g.googletag.pubads().setTargeting(\"has-featured-video\",\"true\")})}();<\/script><script>var _bp=_bp||[];_bp.push({\"div\":\"Brid_1736836\",\"obj\":{\"id\":\"27789\",\"width\":\"1280\",\"height\":\"720\",\"stickyDirection\":\"below\",\"video\":\"1736836\"}});<\/script><script defer src=\"https:\/\/services.brid.tv\/player\/build\/brid.min.js\"><\/script><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>**Magazine &#8211; Business**<\/p>\n<p>Federal Reserve Chairman Aims to Satisfy DC and Wall Street with Rate Reduction<\/p>\n<p>Following an intense battle against inflation over the last two years, the Federal Reserve has decided to reduce interest rates by half a percentage point. This decision, made on September 18, was more aggressive than many investors had anticipated. It marked the Fed&#8217;s first rate cut since the global financial turmoil triggered by the COVID-19 pandemic in March 2020, leading to a surge of optimism in equity markets. Investors viewed this significant rate reduction as a sign that the restrictive monetary policies of recent years are coming to an end.<\/p>\n<p>However, upon closer examination, it appears that Fed Chairman Jerome Powell and his colleagues are not implementing emergency measures to rescue markets from their own challenges. In fact, during a prolonged standoff between the Fed and investors accustomed to easy money from 2008-2022, the central bank has effectively emerged victorious by largely disregarding pressures from both Wall Street and Washington D.C., sticking closely to its planned course set nearly a year ago.<\/p>\n<p>At its final meeting of 2023, the Fed projected three additional rate cuts totaling 75 basis points; however, investors anticipated more than double that number starting in early 2024. The Fed has remained consistent with its previous statements despite market expectations for more aggressive cuts. While it may achieve headlines regarding inflation reduction\u2014something it desperately seeks\u2014it continues to advocate for caution.<\/p>\n<p>The September Summary of Economic Projections indicates that nearly half of voting members believe there will only be one more rate cut this year\u2014aligning with earlier predictions for total cuts in 2024 amounting to 75 basis points. Although a slight majority suggests two further reductions could occur this year, projections indicate a median interest rate of around 3.4% by late 2025\u2014similar to earlier forecasts.<\/p>\n<p>Moreover, the Fed maintains its long-term prediction that interest rates will stabilize at approximately 2.9%, significantly higher than previously assumed zero-bound levels during past policies aimed at maintaining low rates. Powell reiterated this view during his post-meeting press conference.<\/p>\n<p>Crucially, the Federal Reserve is not finished yet; beyond Powell\u2019s usual reminders about being data-driven and focused on achieving long-term inflation below its target of 2%, it also committed to continuing balance sheet reductions through decreased holdings in Treasury securities and mortgage-backed securities\u2014a clear indication that quantitative tightening is ongoing.<\/p>\n<p>Despite political maneuvering from both sides attempting to leverage the Fed&#8217;s decisions for partisan gain ahead of elections in swing states like Pennsylvania where early voting had already begun before announcing these changes\u2014the central bank has adhered closely enough to its strategy that it&#8217;s challenging for either party to claim monetary policy manipulation influenced electoral outcomes.<\/p>\n<p>While it&#8217;s true that past actions contributed significantly towards financing bipartisan spending initiatives during COVID-19\u2014which ultimately led us into one of our worst inflation crises\u2014the Federal Reserve might have achieved what once seemed impossible: distancing itself from blame amid political scrutiny surrounding economic conditions as we approach election season<\/p>\n","protected":false},"author":2693,"featured_media":2343715,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/09\/wall-street-jerome-powell-federal-reserve-nn1.webp","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[41291,41289,41290,34040],"class_list":["post-2343714","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner","tag-dc-politics","tag-fed-chairman","tag-rate-cut","tag-wall-street"],"fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/09\/wall-street-jerome-powell-federal-reserve-nn1.webp","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2343714","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2693"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2343714"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2343714\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2343715"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2343714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2343714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2343714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}