Summary

With inflation near target, the Federal Reserve, led by Jerome Powell, is set to cut its benchmark rate by a quarter-point, to about 4.6%, its second reduction this year.

Despite low unemployment and strong growth, the Fed seeks to recalibrate after previous rate hikes. Economists support gradual cuts but debate the “neutral” rate that sustains growth without restriction.

A Trump presidency and proposed tariffs could reignite inflation, potentially prompting the Fed to adjust its approach.