Traders expect the Federal Reserve to cut baseline interest rates by a quarter-percentage point today, but the decision is likely to draw criticism from candidates auditioning to be the central bank’s next head.
The race to replace Jerome Powell next year has narrowed to five candidates, who have all to some degree backed Trump’s push for lower rates.
The problem is fuzzy economic data: Rising unemployment and inflation call for different fixes.
In the absence of shutdown-delayed September jobs data, the Fed is sorting through shadow metrics and reading news of mounting corporate layoffs, and Powell is trying to hold together a consensus in the face of continued White House pressure.
His job will be to balance the more dovish Fed voting members — including two on the short list for his job — with those who think inflation is the chief risk.