Fed rate cut diverges from global central bank strategy

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Marketplace

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4.8 • 1.3K Ratings

🗓️ 10 December 2025

⏱️ 26 minutes

🔗️ Recording | iTunes | RSS

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Summary

The Federal Reserve cut its key interest rate Wednesday by a quarter point. That’s pretty much what analysts expected. But in other parts of the world, central banks have been signaling that they plan to hold rates steady or even hike them. In this global economy, why is the U.S. out of step? Also in this episode, we hear the pros and cons of quarterly earnings reports, check in on a union-run pipefitting apprenticeship and dig into why wage growth has slowed.

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Transcript

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0:00.0	Spare a thought, all you monetary policy types for Jay Powell and the gang.
0:07.0	You've got one tool. You can't do two things at once.
0:10.2	From American public media.
0:12.7	This is Marketplace. In Los Angeles, I'm Kyle Rizdahl.
0:25.9	It is Wednesday, today the 10th of December.
0:29.0	Good as always to have you along, everybody.
0:31.0	That tool that the Federal Reserve has?
0:33.7	Monetary policy, interest rates.
0:36.1	The two jobs, maximum employment, and stable prices.
0:40.3	The challenge in late 2025?
0:43.1	As I mentioned, and as I've mentioned here before, the situation is that our two goals are a bit in tension.
0:50.4	Yes, yes, you have mentioned that.
0:52.9	Interestingly, everyone around the table at the FMC agrees that inflation is too high and that we want it to come down and agrees that the labor market has softened and that there's further risk.
1:04.2	All right, so what's the problem?
1:05.9	Where the difference is, is how do you weight those risks and what does your forecast look like?
1:11.6	And where do you, ultimately, where do you think the bigger risk is?
1:15.8	You tell us.
1:17.4	We made a decision today.
1:18.5	We had, you know, nine out of 12 supported it.
1:20.8	So fairly broad support.
1:22.7	But it's not like the normal situation where everyone agrees on the direction and what to do. It's more
1:28.9	spread out, and I think that's only inherent in the situation. So here's the way it shook out.
	...

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