Reversal brings Fed into line with Trump

Published July 12, 2019 3:00am ET



The Federal Reserve is set to begin cutting interest rates next month for an unusual reason: Not out of fear that the economy is tipping into recession, but because officials now believe it can generate more jobs than they thought.

In other words, Chairman Jerome Powell and company are acknowledging they made a mistake in the past few years by assuming that sub-5% unemployment rates would yield rising inflation and thus tighter monetary policy was warranted.

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