Fed rate-cut declares ‘mission accomplished’ on inflation — but is it too soon?
Outside the Box
Yardeni: Consumers would welcome a large interest-rate cut, but the Fed’s first step should be small
Published:
It’s a foregone conclusion that the Federal Reserve will launch a new monetary easing cycle on Wednesday by announcing a cut to the federal funds rate (FFR). But a weighty decision faces the Fed: to cut by 50 basis points (0.5%) or 25 (0.25%)?
Fifty is the usual amount kicking off an easing cycle, but the economic circumstances are different this time: there’s no recession clearly barreling toward us. So it would be far better if the Fed cuts the FFR by 0.25%. Whether it will or not is unclear.