US Federal Reserve Expected to Cut Interest Rates Amid Slowing Job Growth, Political Pressure

The U.S. Federal Reserve is widely expected to cut interest rates for the first time in 2025, likely by 25 basis points, in response to a weakening labor market and recession concerns. President Donald Trump has exerted significant pressure on the Fed to lower rates to support economic growth and reduce borrowing costs, while downplaying inflation risks. This political influence has sparked tension over the Fed's independence, highlighted by Trump's attempts to remove Governor Lisa Cook, who is legally contesting her dismissal, and the nomination of his chief economic adviser Stephen Miran to fill a recent vacancy. Despite the easing move, the Fed remains cautious about inflation risks, with markets closely watching Chair Jerome Powell's comments for future policy direction. The ongoing political battles and changes within the Fed's leadership add uncertainty to the central bank's policy outlook amid economic challenges. Overall, the expected rate cut marks the beginning of a potential easing cycle amidst complex economic and political dynamics.