What should the Fed consider when cutting interest rates? In short, the Fed should consider two aspects when cutting interest rates:
First, what is the current interest rate level? (This is why we are discussing interest rate cuts instead of interest rate hikes.) The interest rate hikes during the pandemic in the past few years were very fierce, and have been maintained at a high level of 5.5% for a long time.
Second, indicators such as economic conditions and price inflation. The key indicators of price inflation include CPI, core CPI, core PCE (Figure 2), etc. Check the meaning of the indicators yourself
