SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
brendan boyle
Fed Cut Interest Rates But Can't Undo 'Damage Created by Trump's Chaos Economy,' Expert Says
"Working families are heading into the holidays feeling stretched, stressed, and far from jolly."
Dec 10, 2025
A leading economist and key congressional Democrat on Wednesday pointed to the Federal Reserve's benchmark interest rate cut as just the latest evidence of the havoc that President Donald Trump is wreaking on the economy.
The US central bank has a dual mandate to promote price stability and maximum employment. The Federal Open Market Committee may raise the benchmark rate to reduce inflation, or cut it to spur economic growth, including hiring. However, the FOMC is currently contending with a cooling job market and soaring costs.
After the FOMC's two-day monthly meeting, the divided committee announced a quarter-point reduction to 3.5-3.75%. It's the third time the panel has cut the federal funds rate in recent months after a pause during the early part of Trump's second term.
"Today's decision shows that the Trump economy is in a sorry state and that the Federal Reserve is concerned about a weakening job market," House Budget Committee Ranking Member Brendan Boyle (D-Pa.) said in a statement. "On top of a flailing job market, the president's tariffs—his national sales tax—continue to fuel inflation."
"To make matters worse, extreme Republican policies, including Trump's Big Ugly Law, are driving healthcare costs sharply higher," he continued, pointing to the budget package that the president signed in July. "I will keep fighting to lower costs and for an economy that works for every American."
Alex Jacquez, a former Obama administration official who is now chief of policy and advocacy at the Groundwork Collaborative, similarly said that "Trump's reckless handling of the economy has backed the Fed into a corner—stuck between rising costs and a weakening job market, it has no choice but to try and offer what little relief they can to consumers via rate cuts."
"But the Fed cannot undo the damage created by Trump's chaos economy," Jacquez added, "and working families are heading into the holidays feeling stretched, stressed, and far from jolly."
Thanks to the historically long federal government shutdown, the FOMC didn't have typical data—the consumer price index or jobs report—to inform Wednesday's decision. Instead, its new statement and projections "relied on 'available indicators,' which Fed officials have said include their own internal surveys, community contacts, and private data," Reuters reported.
"The most recent official data on unemployment and inflation is for September, and showed the unemployment rate rising to 4.4% from 4.3%, while the Fed's preferred measure of inflation also increased slightly to 2.8% from 2.7%," the news agency noted. "The Fed has a 2% inflation target, but the pace of price increases has risen steadily from 2.3% in April, a fact at least partly attributable to the pass-through of rising import taxes to consumers and a driving force behind the central bank's policy divide."
The lack of government data has also shifted journalists' attention to other sources, including the revelation from global payroll processing firm ADP that the US lost 32,000 jobs in November, as well as Gallup's finding last week that Americans' confidence in the economy has fallen by seven points over the past month and is now at its lowest level in over a year.
The Associated Press highlighted that the rate cut is "good news" for US job-seekers:
"Overall, we've seen a slowing demand for workers with employers not hiring the way they did a couple of years ago," said Cory Stahle, senior economist at the Indeed Hiring Lab. "By lowering the interest rate, you make it a little more financially reasonable for employers to hire additional people. Especially in some areas—like startups, where companies lean pretty heavily on borrowed money—that's the hope here."
Stahle acknowledged that it could take time for the rate cuts to filter down to employers and then to workers, but he said the signal of the reduction is also important.
"Beyond the size of the cut, it tells employers and job-seekers something about the Federal Reserve's priorities and focus. That they're concerned about the labor market and willing to step in and support the labor market. It's an assurance of the reserve's priorities."
The Federal Reserve is now projecting only one rate cut next year. During a Wednesday press conference, Fed Chair Jerome Powell pointed to the three cuts since September and said that "we are well positioned to wait to see how the economy evolves."
However, Powell is on his way out, with his term ending in May, and Trump signaled in a Tuesday interview with Politico that agreeing with immediate interest rate cuts is a litmus test for his next nominee to fill the role.
Trump—who embarked on a nationwide "affordability tour" this week after claiming last week that "the word 'affordability' is a Democrat scam"—also graded the US economy on his watch, giving it an A+++++.
US Sen. Bernie Sanders (I-Vt.) responded: "Really? 60% of Americans live paycheck to paycheck. 800,000 are homeless. Food prices are at record highs. Wages lag behind inflation. God help us when we have a B+++++ economy."
Keep ReadingShow Less
Fed Interest Rate Cut Shows Trump Agenda 'Pushing Our Economy to the Brink': Economist
"Working families are paying the price" for the president's "reckless" policies, said Groundwork Collaborative's Alex Jacquez.
Oct 29, 2025
As Americans face tariff-related price hikes, surging health insurance premiums, and fallout from the government shutdown, from missed paychecks to no food assistance, the Federal Reserve on Wednesday announced its second interest rate cut of the year.
"Job gains have slowed this year, and the unemployment rate has edged up but remained low through August," the US central bank said in a statement about the Federal Open Market Committee cutting the benchmark interest rate by a quarter of a percentage point to 3.75-4%, its lowest level in three years. "Inflation has moved up since earlier in the year and remains somewhat elevated."
When the Fed slashed the federal funds rate last month, economist Alex Jacquez warned that it would "do little to address" the "economic turmoil" created by President Donald Trump. On Wednesday, the former Obama administration official, who is now chief of policy and advocacy at the think tank Groundwork Collaborative, again took aim at the US leader.
"The Fed's decision only confirms what Americans already know—the economy is slowing, job growth has stalled, prices keep climbing, and consumers are pulling back because they're out of options," Jacquez said in a statement. "Trump's reckless economic agenda is pushing our economy to the brink, and working families are paying the price."
US House Budget Committee Ranking Member Brendan Boyle (D-Pa.) similarly said in a Wednesday statement that "today's rate cut is yet another warning sign about the sorry state of Donald Trump's economy."
"Nearly half of all states are now in or near recession, inflation is climbing, and the labor market is losing strength," Boyle noted. "This is all a direct result of Trump's reckless tariff taxes and his chaotic economic agenda."
"At the same time, working families are facing the largest spike in health insurance premiums in our nation's history," he stressed. "I'll keep fighting to lower costs, protect affordable healthcare, and make sure every American has access to a good-paying job.”
Rohit Chopra, who directed the Consumer Financial Protection Bureau during the Biden administration, before Trump gutted the agency, was also critical of the Republican president on Wednesday.
"While he is not in the room to vote on Fed interest rates, President Trump's shadow looms large over the Federal Reserve and many members seem eager to please him," Chopra said. "While Gov. Lisa Cook is fighting back, markets seem to understand that the Fed's decision-making will be heavily shaped by the whims of the White House."
Trump is trying to oust Cook from the Fed's Board of Governors, which her lawyers call "unprecedented and illegal." The US Supreme Court is set to hear arguments in her case in January; in the meantime, earlier this month, the justices allowed her to remain in her post.
Keep ReadingShow Less
'Devastating' New Jobs Report Shows Labor Market 'Cracking' Under Trump
"The theory of Trumponomics is failing," said one economist.
Sep 05, 2025
A federal jobs report released on Friday showed the US economy added a mere 22,000 jobs in August in yet another signal of weakness in the US labor market.
Economists had projected the economy would produce 75,000 jobs on the month, which means that the Bureau of Labor Statistics (BLS) numbers released on Friday were well below the consensus estimate.
What's more, the total number of jobs created in July and June were once again revised downward, and the economy as a whole has added an average of fewer than 30,000 jobs over the last three months.
Heather Long, the chief economist at Navy Federal Credit Union, put the bad jobs report in stark terms.
"The labor market is going from frozen to cracking," she said, and then pointed to net job losses in industries including mining, construction, and manufacturing that show significant stress in the blue-collar economy. In fact, the majority of job growth came from the healthcare industry over the last month.
"The US job market is almost entirely dependent on healthcare," she observed. "That's not healthy for the economy."
Justin Wolfers, an economist at the University of Michigan, also said that the new numbers showed a continued deterioration in both the US labor market and the economy as a whole.
"I'm worried," he said. "The economy was in a good place in late 2024. That's no longer true. And the trajectory is, at a minimum, concerning. That's millions of people's lives, and millions of stories of pain."
Wolfers also zeroed in on the fact that manufacturing employment has been contracting for several months, despite US President Donald Trump's pledges to lead a manufacturing revitalization.
"But the Administration has made dramatic policy shift to boost manufacturing, and it just ain't working," he said. "Manufacturing employment fell [by 12,000 jobs], and is down [78,000 jobs] over the year."
Former BLS commissioner Erika McEntarfer, whom Trump fired last month after he baselessly accused her of concocting negative job numbers to harm him politically, argued on Bluesky that the new report's downward revisions of previous monthly estimates are indicative of a labor market that is very quickly cooling.
"The larger-than-usual downward revision last month was in large part driven by a negative skew in the job growth distribution among late reporting firms," she said. "That's unusual, but it's happened before when the pace of job growth slows rapidly. This print is more evidence that was the case."
Mike Konczal, senior director of policy and research at the Economic Security Project and former member of President Joe Biden's National Economic Council, argued the new jobs report demonstrates that "the theory of Trumponomics is failing."
"The first theory of Trumponomics was that tariffs would build up manufacturing work and federal workforce cuts would free up workers for them," he explained. "That's failed. Manufacturing lost jobs almost as fast as the federal workforce (-12 vs. -15K)."
Konczal then showed how Trump's tariffs have hurt his stated goal of bringing back well-paying jobs for blue-collar men, as industries that produce such jobs have also been harmed by his tariffs on foreign goods and materials.
He also pointed out that Trump advisers claimed that mass deportations of undocumented immigrants would create new job openings that native-born workers would rush in to fill.
"But, you guessed it, that's also failing," he said. "Amidst the broader weakening, the native-born unemployment rate is at the highest levels since the pandemic."
Elise Gould, the director of health policy research at the Economic Policy Institute, similarly noted that "there have... been sustained losses over recent months in manufacturing, construction, and mining," in recent months, which she said was "an indication that Trump's blue-collar renaissance is clearly not happening."
Alex Jacquez, chief of policy and advocacy at the progressive advocacy organization Groundwork Collaborative, called the jobs report "devastating," while laying the blame at the feet of Trump.
"Trump's promises to working families have fallen flat," he said. "The unemployment rate is the highest in nearly four years, the economy has lost nearly 40,000 manufacturing jobs this year alone, and millions of workers are unable to find full-time employment. Families are getting fewer chances to secure the American dream in Trump's economy."
Rep. Brendan Boyle (D-Pa.) reacted to the jobs report by issuing a scathing rebuke to Trump and his management of the economy.
"Donald Trump inherited an economy built on years of steady job growth," he said. "In just seven months, he's managed to screw it up—just like he's screwed up everything else in his life. Now, working families are getting squeezed from every direction: higher prices, Republicans' Big Ugly Law ripping health care away from millions, and a job market that's slowing down."
Keep ReadingShow Less
Most Popular