Central Banks
Powell Emerges Stronger After Leading Fed to Big Rate Cut
- Forecasts show many officials likely favored smaller move
- Chair’s soft landing priority drove him to urge for bigger cut
Jerome Powell
Photographer: Al Drago/BloombergThis article is for subscribers only.
One week before Federal Reserve officials gathered in Washington this month, they were split over how fast to lower interest rates.
The economy wasn’t flashing the kind of obvious warning signs that would typically prompt an aggressive response from the US central bank. But a notably weak run of jobs data, including the August employment report the previous Friday, had convinced Chair Jerome Powell that a bigger-than-usual rate cut was necessary to insure against rising risks to the labor market. A pair of inflation reports that week showing price pressures continuing to ease sealed the deal.