Higher tariffs are pushing up prices in some categories of goods, resulting in higher overall inflation. A reasonable base case is that the effects on inflation will be relatively short-lived, a one-time shift in the price level. But it is also possible that the inflationary effects could instead be more persistent.And that is a risk to be assessed and managed. Our obligation is to ensure that a one-time increase in the price level does not become an ongoing inflation problem. In the near term, risks to inf ...

much Liza Schley with ABC News. Uh what is your explanation for why the job market is weakening right now and what will this rate cut do to improve the job market. >> So the I think the um there are two things affecting the job market and one of them is just a dramatic reduction in the supply of new workers.So, and that's two things. That's uh declining labor force participation, which is a cyclical thing. And then there's declining immigration, which is just a big policy change that actually began in the l ...

much Liza Schley with ABC News. Uh what is your explanation for why the job market is weakening right now and what will this rate cut do to improve the job market. >> So the I think the um there are two things affecting the job market and one of them is just a dramatic reduction in the supply of new workers.So, and that's two things. That's uh declining labor force participation, which is a cyclical thing. And then there's declining immigration, which is just a big policy change that actually began in the l ...

Core Points - The Federal Reserve has cut its benchmark interest rate by a quarter point for the second time since September, following a nine-month period without cuts [1] - The federal funds rate influences borrowing costs for consumers, affecting credit cards, auto loans, and mortgages [1][3] - The Fed aims to manage inflation and encourage full employment, facing challenges with inflation above the 2% target and a weak job market [3] Impact on Savings and Loans - Falling interest rates will reduce the attractiveness of yields on savings accounts and certificates of deposit [4] - After the last rate cut in September, three of the top five high-yield savings accounts reduced their rates, with current top rates around 4.46% to 4.6% [5] - The national average for traditional savings accounts is significantly lower at 0.63% [6] - Prospective homebuyers have already factored in the recent rate cut into the housing market [7]

Summary of Key Points from the Federal Reserve System Update / Briefing Industry Overview - The briefing primarily discusses the economic outlook and monetary policy of the Federal Reserve, focusing on employment, inflation, and interest rates. Core Points and Arguments 1. **Monetary Policy Adjustment**: The Federal Open Market Committee (FOMC) decided to lower the policy interest rate by a quarter percentage point to a target range of 3.75% to 4% to support maximum employment and stable prices [1][4][6]. 2. **Economic Growth**: GDP growth was reported at 1.6% for the first half of the year, down from 2.4% the previous year, with stronger consumer spending noted as a key driver [2][49]. 3. **Labor Market Conditions**: The labor market is showing signs of cooling, with job gains slowing significantly and the unemployment rate remaining low at 4.3% [2][54]. There are concerns about declining labor force participation and immigration affecting job availability [3][38]. 4. **Inflation Trends**: Inflation remains elevated, with total Personal Consumption Expenditures (PCE) prices rising 2.8% over the past year. Core PCE prices also increased by 2.8%, indicating persistent inflationary pressures [3][4][24]. 5. **Risks to Employment and Inflation**: The balance of risks has shifted, with downside risks to employment increasing and upside risks to inflation remaining [5][58]. The FOMC is navigating a challenging situation where one goal may conflict with the other [5][58]. 6. **Balance Sheet Management**: The FOMC plans to cease the reduction of aggregate securities holdings as of December 1, indicating a shift towards a more neutral policy stance [6][8][21]. 7. **Diverse Views within the Committee**: There are strongly differing views among committee members regarding future policy actions, particularly concerning the potential for further rate cuts in December [10][36][58]. 8. **Impact of Tariffs**: Higher tariffs are contributing to inflation in certain goods, but the FOMC believes these effects may be short-lived and should not lead to ongoing inflation problems [4][25][40]. 9. **Investment in AI and Infrastructure**: Significant investments in AI and infrastructure are noted, with the FOMC indicating that these investments are not particularly sensitive to interest rate changes [27][28][48]. 10. **Consumer Spending**: Despite a cooling labor market, consumer spending remains strong, particularly among higher-income consumers, which is a significant driver of economic growth [48][49]. Other Important Considerations - **Data Availability**: The ongoing federal government shutdown has delayed some important economic data, complicating the FOMC's ability to assess the labor market and inflation accurately [2][19][50]. - **Long-term Inflation Expectations**: Most measures of longer-term inflation expectations remain consistent with the Fed's 2% inflation goal, despite current elevated levels [4][24]. - **K-shaped Economic Recovery**: The economy is exhibiting a K-shaped recovery, where higher-income consumers are faring better than those at the lower end of the income spectrum [32][55]. This summary encapsulates the key points discussed in the Federal Reserve's briefing, highlighting the current economic landscape, monetary policy decisions, and the challenges faced by the committee.

BUYING ITS FIRST LOAD OF U.S. SOYBEANS SO FAR THIS YEAR. JOINING US NOW, MSNBC SENIOR WHITE HOUSE REPORTER VAUGHN HILLYARD FROM BUSAN, SOUTH KOREA, CNBC SENIOR ANALYST AND COMMENTATOR RON INSANA AND UNIVERSITY OF MICHIGAN PROFESSOR OF ECONOMICS AND PUBLIC POLICY JUSTIN WOLFERS. QUARTER POINT CUT JUST CONFIRMED.SO, JUSTIN, I'M GOING TO GET YOU ON THAT TO START. >> YEAH, I'VE GOT THAT RIGHT IN FRONT OF ME. >> SO PRETTY MUCH.>> WHAT EVERYONE. >> EXPECTED WOULD HAPPEN HAPPENED. >> DON'T READ TOO MUCH INTO THIS. ...

Core Inflation Insights - Core inflation remains at 3%, with some components coming in lower than expected [1][2] - The inflation rate excluding tariffs is estimated to be around 2.3% to 2.4%, which is close to the 2% target [5][6] Goods and Services Inflation - Goods prices are increasing due to tariffs, contrasting with a long-term trend of mild deflation in goods [3][5] - Housing services inflation is decreasing and is expected to continue this trend, which is a positive sign [3][4] - Non-housing services inflation has been stable but does not provide significant signals about economic tightness [4][9] Labor Market and Economic Policy - The labor market is not perceived as overly tight, which reduces the risk of persistent inflation [7][10] - Current monetary policy is described as modestly restrictive, contributing to a gradually cooling economy and labor market [10][11] Future Inflation Expectations - There is a commitment to return inflation to the 2% target, with market surveys indicating credibility in this commitment [11]

Janelle Marte with Bloomberg. How are officials interpreting the latest CPI report. So some components came in lower than expected but core inflation was still at 3%.So at this moment are what what are you learning about the drivers and also what are do you view that the risks are greater that the Fed makes a mistake on employment or inflation. So okay so the September um CPI report we didn't get PPI after that which is which is important for translation into what we look at which is PCE inflation but we ca ...

Thank you. Colobby Smith with the New York Times. So much of the rationale for cutting interest rates even as inflation moves away from the 2% target seems to be, you know, that there are these mounting downside risks to the labor market.But if those don't materialize and the labor market either stabilizes around current employment levels or even starts to strengthen somewhat, how would that change your perception of how much interest rates need to fall from here. Would you then be a bit more concerned abou ...

In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen in recent months. Inflation has eased significantly from its highs in mid 2022, but remain somewhat elevated relative to our 2% longerrun goal. Estimates based on the consumer price index suggest that total PCE prices rose 2.8% 8% over the 12 months ending in September and that excluding the volatile food and energy categories, core PCE prices rose 2.8% as well.These readings are higher than earlier ...