Federal Reserve faces dilemma amid expected rate cut decision

FOX Business cited CEI’s expert on inflation data

The latest inflation data from September released on Friday showed that the consumer price index (CPI) ticked up to 3% year-over-year. The ongoing government shutdown has indefinitely delayed the September jobs report, though data released over the summer showed a slowdown in hiring dating back to this spring – creating a challenging situation for policymakers.

Ryan Young, senior economist at the Competitive Enterprise Institute, told FOX Business that “Three percent inflation is usually high enough for the Fed to consider raising interest rates in order to get inflation closer to its 2% target.”

“This time around, there are warning signs all around the economy, from rising unemployment to seven straight months of contraction in manufacturing due to tariffs,” Young said. “That is what is pushing Fed officials towards cutting rates. But that stimulus comes with a tradeoff: it risks higher inflation. They’re taking a chance, and it might not pay off.”

Read more at FOX Business