The Fed Should Pause in Cutting Interest Rates

Investors expect the Federal Reserve to cut its policy rate on Oct. 29, and once more by the end of the year. Right now, amid enormous uncertainty about where the economy is headed, the case for cutting is weak. The Fed would be wiser to pause.

Core consumer-price inflation edged lower in September — but at 3%, where it’s lingered for the past year, it remains well above the central bank’s target. True, as Fed officials have stressed, the labor market has cooled — yet unemployment, at 4.3% in August, is still in line with the bank’s mandate of “maximum employment.” Looking at those two numbers, Lorie Logan, president of the Federal Reserve Bank of Dallas, was right to say earlier this month that “we’re further away on the inflation side of those objectives.”