It Federal reservation On Wednesday he announced the first reduction in interest rate of the year, as policymakers reduced their reference interest rate at 25 points in their prosecutor, as the signs of a weakening of labor exceeded high inflation.

Following the Central Bank’s decision to reduce the rates for the first time since December 2024, the federal fund rate will be in a new 4% range to 4.25%. The cut occurs after the Fed left the rates inalted in its first five meetings this year in the midst of economic uncertainty.

Policy makers have been watching Economic data This has shown a slowdown in recruitment, as companies are raised with changes in commercial and immigration policy, while inflation has remained high and tended in recent months, as rates related prices are leaked to inflation data.

This dynamic has presented a challenge for policymakers to achieve the two FED’s double term goals to promote maximum employment and stable prices in accordance with the FED 2% inflation.

The Open Market Federal Committee (FOMC), which guides the movements of monetary policy of the Central Bank, said in its announcement that labor gains have slowed down and that the unemployment rate has increased, but it is still relatively low, while inflation has increased and is still slightly high. The FOMC added that, in the monitoring of the two sides of the double term that “the low risks for employment have increased”.

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The President of the Federal Reserve, Jerome Powell, opened the door at a small rate in a speech at the Fed Jackson Hole annual conference. (Chip Somodevilla / Getty Images / Getty Images)

Only one person in charge of politics, the governor of the Fed Jeffrey Miran, who spread out of the 11-1 vote on the FOMC. Miran, who preferred a 50 basis cut at this meeting, replaced the former Fed Governor Adriana Kugler, who resigned in August.

Chair of the Federal Reserve Jerome Powell He has previously said that if the indicators around inflation and the labor market move away from these goals, policymakers will focus on addressing what is farther from the goal.

Powell began his press conference by saying that the FED is focused on the two double term goals, and said that recent economic developments have suggested a slowdown in growth.

“In general, the slowdown marked in both the supply and the demand for workers is unusual. In this less dynamic and slightly smoother job market, low risks for employment seem to have increased,” said Powell. “Inflation has been significantly relieved of its highs in mid -2012, but it remains a little high with respect to our longer 2% goal.”

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Powell said the Fed will ensure that fares induced inflation does not become a persistent problem. (Kent Nishimura / Getty Images / Getty Images)

Powell reiterated it rates induced price hikes It could represent a unique change in the price level, but could represent a more persistent inflationary challenge. He explained that the FED’s obligation is to make sure that a unique increase in price level does not become a current inflation problem. “

“We have begun to see that the prices of the goods are shown in a higher inflation and, in fact, the increase in the prices of the goods is most of the increase in inflation or, perhaps, all the increase in inflation throughout this year. They are not very great effects at this time, and we hope that they continue to build this year and next year,” said Powell.

Powell said that the Fed believes that the upward trend of inflation will be a unique increase in rates prices, but said that the Central Bank cannot be taken for granted, as monetary policy weighs.

“But we can’t assume it,” he said. “Our job is literally to ensure that this is what happens and we will do this work.”

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Powell was asked about signs of Rates that cause inflation He said that the inflation of the goods was negative last year, but increased by 1.2% last year, after the prices of the goods had generally fallen for 25 years before the pandemic even after adjusting to the quality of the product.

He added that the rates provide something like 0.3 or 0.4 percentage points to the current reading of PCE inflation of 2.9%.

“What seems to happen is that the rates do not pay them mostly for exporters,” Powell said. “All these companies and entities at the center will tell you that they have all the intentions to go on time, but now they do not. consumerThe passage was quite slow, it was slower and smaller than we thought. But the tests are clear that there is a little step. “

In the Fed Chair he asked about the independence of the Central Bank, given the President Donald Trump’s Efforts to influence the Central Bank’s decision and how to assure the public that their monetary policy movements are based on economic conditions instead of political considerations.

Powell said that it is “deeply in our culture to do our job based on incoming data and never anything else”, adding that “you will know it in the way we talk about it, for the speeches that people make, because of the decisions we make.”

“We do not mark these questions at all or see them in terms of political results. I think when you reach another part of Washington, everything is seen through the slowness of DO DO Help or harms this political party,” he said. “I think people find it difficult to believe that this is the way to think of things in the Fed. We are taking a longer perspective, we are trying to serve the North -American people the best we can.”

U.S. work growth until March was reviewed less than 911k

Edward Lawrence de Fox Business asked Powell about the preliminary review of the Bureau of Labor Statistics Statistics, which showed that the Labor Market added 911,000 jobs less than was reported during the period from April 2024 to March 2025 and as the FED bases decisions on this data.

Powell said that it was “amazing the proximity of the expectation and that the reason for this was for the last group of quarters, there was an almost predictable cost and I think the Labor Statistics Office really understands it and they are working hard to solve it.”

Lawrence asked if Fed had changed the previous decisions to leave the rates without a change, and Powell responded: “You know, we must live life by looking at the windshield, instead of the later sight mirror, as you know. And all that I can say is that we see where we are now, and we do appropriate actions and we have done this proper action today.”

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Fed Lisa Cook’s governor participated in the meeting after an appeal court confirmed a lower court ruling that temporarily blocked Trump’s effort to say goodbye. (Saul Loeb / Afp through Getty Images / Getty Images)

The FED has been under the pressure of Trump’s administration to reduce interest rates, and the President has repeatedly threatened to shoot Powell, although he has since supported these threats with the chair mandate to expire in May 2026.

Powell was asked if he plans to leave the Fed after his term ends instead of remaining as Fed governor, as this term works until 2028, although he refused to comment.

Trump also tries to say goodbye to Governor Fed LISA COOK Although a district court reported that an appeal court temporarily confirmed the shot and allowed him to participate in this week’s FOMC meeting.

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Cook has not been accused of any crime related to the complaints, which were proposed by Trump Ally and the director of the FHFA, Bill Pulte. Powell refused to comment on the case of Trump’s effort to shoot in the kitchen.