Central Banks
Fed Opts for Outsize Cut as Powell Seeks to Ensure Soft Landing
- Powell says half-point cut reflects ‘risk management’ approach
- Officials are split on the outlook for additional cuts in 2024
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Federal Reserve Chair Jerome Powell led his colleagues to an outsize interest-rate cut designed to preserve the strength of the US economy as risks to the labor market mount, marking an end to their single-minded focus on quashing inflation.
The Fed chief said launching the unwind of its historic tightening campaign with a big move while the US economy is still strong would help limit the chances of a downturn. But he was careful not to commit the Fed to a similar pace going forward, saying future moves would be based on how the economy performs in the months ahead.