Welcome back to The Breakdown with me, NLW.

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What's going on, guys? It is Thursday, September 18th, and today it is, of course, Fed Day, or Fed Day plus one, but you get it, where we explore Fed Day. Anyways, before we get into that, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash

breakdown pod. Yesterday, the long-awaited rate cut finally happened. The FOMC meeting concluded

with the approval of a single cut, reducing the target range to between 4 and 4.25%. This is the first

rate cut since the November meeting last year. That mini-cutting cycle came to an

abrupt halt as the stock market ripped following the election of Donald Trump. Since then, the Fed has

been paralyzed, first by a lack of clarity on what the administration's policies would look like,

then due to waiting for a tariff-induced inflation spike that never truly arrived.

Heading into this meeting, the weakening labor market was the dominant consideration.

The Bureau of Labor Statistics revised away almost a million jobs from the payroll data

in the annual revision last month.

Jobs numbers have been tepid over the past four months, including a negative print in June,

which was the first since the pandemic.

Delivering his assessment of the situation, Powell said,

In this less dynamic and somewhat softer labor market, the downside risks appear to have risen.

On inflation, Powell noted that although recent numbers are, quote, somewhat elevated,

long-term expectations remain well anchored. The FOMC's base case is still that tariffs will

cause a one-time price shock as they flow through the economy.

Powell summarized, in the near term, risks to inflation are tilted to the upside, and risks to employment to the downside, a challenging situation. When our goals are intention like this,

our framework calls for us to balance both sides of our dual mandate. Accelerating downside risks

in the labor market were judged as more concerning than the risk of

...