Only a Half-Point Rate Cut From the Fed Will Do
Anything less would fail to fix the imbalances in the global bond market, continuing to weigh on economic sentiment.
It’s time for the Federal Reserve to be bold.
Photographer: Chip Somodevilla/Getty Images North AmericaFederal Reserve Chairman Jerome Powell was right in making clear during his Congressional testimony last week that despite the strong jobs report for June, the central bank will cut interest rates for the first time since 2008 at its monetary policy meeting later this month. He was wrong in dismissing the need to reduce rates by half a percentage point.
By lowering its target for the federal funds rate by just a quarter point, the Fed risks no less than a recession. The Fed has a history of moving too slow to respond to evidence of weaker growth, and a bold move now would help ensure the economy achieves the rare “soft landing.”