The Federal Reserve made its second consecutive interest rate cut on Thursday, dropping the federal funds rate by a quarter of a percentage point to 4.50% and 4.75%.

In the middle of a relaxation of the labor market and steady progress in combating inflation, the Federal Open Market Committee voted unanimously to cut rates by 25 basis points. At the September meeting, the central bank’s decision-making body opted for a jumbo, 50 basis points discount to the benchmark rate, its first cut in more than four years.

“The Committee believes that the risks to the achievement of the employment and inflation objectives are roughly balanced,” the FOMC said in a statement Thursday. “The economic outlook is uncertain and the Committee is mindful of the risks to both sides of its dual mandate.”

Questions about the direction of the US economy have grown in the days following Donald Trump the victory of the presidential elections. More economical ANALYSIS have shown that Trump’s proposals could have knock-on effects on the economy, including rising inflation, increase in unemploymentGDP decline, adding massively to the federal debt, hastening social security insolvency and increase in tax rates for the vast majority of Americans.

“In the short term, the election will have no effect on our policy decisions,” Fed Chairman Jerome Powell said in a news conference after Thursday’s meeting.

“The economy is strong overall and has made significant progress toward our goals over the past two years,” Powell told reporters. “We remain confident that with an appropriate recalibration of our policy stance, the strength of the economy and labor market can be maintained, with inflation coming down sustainably to 2%.”

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For the data-dependent Fed, it has become difficult to gauge the health of the economy as recent data it was muddy by dual blows from hurricanes and a massive work stoppage at Boeing (nay).

US economy it added only 12,000 jobs in October, well below Wall Street expectations and falling from the 12-month average of 194,000, according to DATA from the Bureau of Labor Statistics (BLS) released Friday. Much of this was attributed to temporary shocks, particularly in the temporary help services and manufacturing sectors.

However, downward revisions to August and September data paint a picture of a weakening labor market: August job creation was revised down by 81,000 to 78,000 from 159,000; and September was revised down by 31,000 to 223,000 from 254,000. Unemployment rate held steady since September at 4.1%

“The labor market has cooled a lot from the overheated state of two years ago and is now essentially in balance,” Powell said, justifying continued rate cuts. “It continues to cool, albeit at a modest rate, and we don’t need additional cooling.”

At the same time, inflation as measured by the Federal Reserve’s preferred inflation gauge, Personal consumption expenditure index (PCE).slowed to an annual rate of 2.1 percent in September, the Bureau of Economic Analysis said last Thursday.

The consumer price index, another key measure of inflation, rose an annualized 2.4 percent in September, according to the BLS — a 0.1 percentage point slowdown from August and the slowest annual reading since February 2021. These numbers indicate a slow rise in inflation toward the Fed’s target. of 2%.

A majority, or about 78 percent, of economists expect the FOMC to make another 25 basis point rate cut at its December meeting, according to CME Group (CME) FedWatch tool. However, some Wall Street executives have question that faith, citing inflationary pressures.

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