August 1, 2019

Anna Murray 

On July 31, Federal Reserve officials at last announced a quarter-point interest-rate cut for the first time since 2008 crisis. People may not feel the difference, but it can still influence the borrowing and saving rates every day. Fed’s cut has the potential impacts to keep away from a recession and even save the weakening economy through preventing unemployment.

The Fed’s cutting rates has won the heart of conservatives and liberals, markets and media except President Donald Trump, who hopes for further cuts. According to Josh Barro, a journalist of New York Intelligencer, such is kind of a Pyrrhic victory. Trump can “trade-war his way,” while the Fed has to find a win-win policy for price stability and desired employment by cutting interest rates. Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez even suggest to print money if they want to carry out ambitious social programs.

Experts advise Trump to stop the trade war, if he really wants to improve the US economy and pave the way for his re-election. If not, the Fed will be forced to make further cuts to meet the trade deficit.

Photo:Webshot.