In response to Trump's influence, the Federal Reserve lowering interest rates for the first time in the current year
The Federal Reserve, the United States' central banking system, is currently navigating a delicate balancing act as it attempts to keep both inflation and unemployment in check.
On September 16, 2025, President Trump appointed Stephen I. Miran as a new member of the Board of Governors of the Federal Reserve. Miran was sworn in and his term will end on January 31, 2026. However, there is no specific information available about how Miran spoke or what stance he took in the last Federal Reserve meeting.
In recent developments, the Fed lowered its benchmark rate by a quarter percentage point this week. This move is intended to make it cheaper to get a car loan, bankroll a business, or carry a balance on a credit card.
However, inflation remains higher than the central bank would like. Some Fed officials project that mortgage rates might drop by another quarter point or a half point by the end of the year, while one hawkish committee member projects rates might even go up a quarter point.
The Fed's efforts to fight job market issues could push the unemployment rate up, a concern that has been raised due to the very little job growth since April. There is also concern that people who lose their jobs are having a harder time finding new ones.
Fed Chairman Jerome Powell and his colleagues are facing a challenge to the independence of the Federal Reserve, with President Trump waging a high-pressure campaign for much lower rates. Yet, the firewall between the White House and the Fed appears to be holding for the moment.
Interestingly, Stephen Miran, Trump's newest appointee to the Fed board, voted for a bigger half-point interest rate cut. However, he was not supported by other new colleagues, Chris Waller and Michelle Bowman, in this proposal.
Miran, on the other hand, appears to project mortgage rates to be more than a full percentage point lower by the end of the year. The central bank, however, is trying to shore up the job market.
Powell has described the Fed as operating at arm's length from the White House, not swayed by short-term political pressures. This stance is crucial in maintaining the Fed's independence and ensuring its decisions are based on economic data, rather than political considerations.
In conclusion, the Federal Reserve is facing complex challenges in managing the economy, balancing inflation and unemployment, and maintaining its independence. These challenges are further complicated by political pressures, but the Fed continues to strive for economic stability and growth.
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