"The long-awaited resumption in the Fed's interest rate cuts occurred, as the central bank weighed the risk associated with a decelerating labor market and accelerating inflation and determined that the job market was the bigger risk to the overall economy. The central bank reduced short term rates by a quarter of a percentage point (0.25 percent), putting the Fed funds rate at a range of 4.25-4.5%."
"This is evidenced in the Bureau of Labor Statistics' (BLS) Preliminary Annual revision to its data. (The final estimate will be released in February 2026). The BLS said there were 911,000 fewer jobs than originally reported, which was the largest preliminary revision on record, dating back to 2000. That means that average monthly job growth for the period went from 147,000 to 71,000."
The Federal Reserve cut short-term interest rates by 0.25 percentage points, setting the federal funds rate at 4.25–4.5%. The decision prioritized risks from a decelerating labor market over accelerating inflation. The Fed had cut rates a year earlier and made two additional 0.25% reductions in October and December 2024 before pausing because of uncertainty from proposed tariffs and new immigration policies. The Fed balances a dual mandate of fostering a strong labor market and achieving 2% inflation over time. A large BLS preliminary revision showed 911,000 fewer jobs, reducing average monthly job growth from 147,000 to 71,000, while CPI rose 2.9% year-over-year.
Read at www.mercurynews.com
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