🔗 Share this article Federal Reserve Lowers Interest Rates for Second Time This Calendar Year Amid Economic Uncertainty The United States central bank lowered borrowing costs on midweek, marking the second rate cut this year amid financial volatility stemming from the government closure and tariff policies. Move Comes at Unprecedented Time for Central Bank The move to cut the benchmark interest rate by a quarter point to a span of 4% to 3.75% arrives at an extraordinary juncture for the central bank. The institution has been under immense pressure to cut rates even with persistent inflation. Fed Statement Highlights Labor Market Shifts In a announcement, the Federal Reserve stated that the jobless rate had increased but remains low. “Job gains have decelerated,” the statement notes. “Price increases has moved up and remains moderately high.” Federal Closure Hinders Fed’s Job The ongoing federal government shutdown, now one of the longest in American history, has also complicated the central bank’s task. Gathering of important financial statistics has been indefinitely halted as staff at the BLS are furloughed during the shutdown. Data Gap Affects Policy Decisions The Fed usually studies labor statistics to assess labor market conditions, such as the count of new jobs added to the market and the current jobless percentage. The most recent employment data was published in the beginning of last month, prior to the shutdown, and gave a relatively bleak snapshot of the employment scene in August. The figure of jobs created to the market in the summer month was lower by more than 100,000 since the spring, and joblessness crept up to four point three percent – the highest since three years ago. Private Data Indicate Continued Decline Though BLS was scheduled to release September’s employment data in early October, it halted its release once the shutdown began. Private payroll firm ADP indicated earlier this month that the private sector cut 32,000 positions in last month, a sign that the employment landscape is continuing to slow. “Both the supply and demand for labor has declined quite sharply,” central bank head Jerome Powell stated recently, a trend he had earlier attributed stems from trade and immigration measures. Price Data Reveals Gradual Increase Though BLS’s jobs report has been suspended, the agency still released its price statistics for last month that indicated that prices are rising, albeit slowly. Prices rose three percent over the last year, the peak since the start of the year. In April, the yearly price increase was two point three percent, the lowest it has been since three years ago. The Fed’s target inflation rate is 2%.