Overview

• Chair Jerome Powell said there is no risk-free path, citing upside risks to inflation and rising downside risks to employment, and described policy as still modestly restrictive and data-dependent.
• The Fed lowered its benchmark rate by 25 basis points last week to a 4.00%–4.25% target range, and projections point to roughly two additional quarter-point reductions in 2025.
• Labor indicators have softened with payroll gains averaging about 29,000 in recent months and unemployment at 4.3%, while officials estimate tariffs are adding only a small, likely temporary, lift to prices.
• Vice Chair for Supervision Michelle Bowman urged a proactive, faster pace of easing to protect jobs, contrasting with Powell’s gradualism, and said tariffs’ inflation impact looks limited and short-lived.
• New Governor Stephen Miran, the lone dissenter on last week’s decision, argued for a 50-basis-point cut and said rates should head toward 2%–2.5%, as officials and markets await the Sept. 3 jobs report, mid-October inflation data, and the Oct. 28–29 meeting, with political pressure ongoing as the White House appeals to the Supreme Court to remove Governor Lisa Cook.