Capital Economy, Business and Finance
Jobs or prices – which matter most? That's the question for Jerome Powell and his fellow Fed rate setters as they prepare for a meeting on Wednesday that will sharpen the focus of the US economic outlook eight short weeks before the election. Analysts see the Fed's big choice this week as between a quarter and half a point. The former would signal caution on inflation even at the cost of a potential uptick in unemployment. The latter would signal confidence that US inflation is tamed and it's time to unleash capitalism's animal spirits. The big cut would feel more optimistic. A smaller one could nudge the US into recession, which no White House incumbent would want to have to explain. The FT's editorialists and the WSJ's Greg Ip want the big one. Good job Powell, a Trump nominee, is by law politically independent.
