Federal Reserve's Bold Rate Cut, Retail Sales Rise And More: This Week In Economics

The past week was a rollercoaster ride for the financial world, with the Federal Reserve making a bold move, retail sales showing unexpected resilience, and prominent voices sharing their views on the economy. Here’s a quick recap of the top stories that made headlines.

Federal Reserve Slashes Interest Rates

In a surprising move, the Federal Reserve cut interest rates by 0.5% at its September Federal Open Market Committee meeting, marking the first rate cut in over four years. This decision, which broke a 12-month streak of steady rates, caught Wall Street analysts off guard as they had anticipated a more modest 25-basis-point cut. Read the full article here.

Obama-Era Economist Surprised by JD Vance’s Economic Optimism

Betsey Stevenson, a former economic advisor in the Obama administration, expressed her astonishment at Donald Trump's running mate J.D. Vance and his supporters' economic optimism despite the Federal Reserve's recent rate cut. Stevenson stated, "I have to admit that I am pleasantly surprised that J.D. Vance and his supporters think the economy is too strong for the rate cut." Read the full article here.

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Retail Sales Rise More Than Expected

U.S. retail sales rose more than expected by 0.1% month-over-month in August, signaling a resilient consumer spending momentum in the middle of the third quarter. This increase, which was more than anticipated, could boost the chances of a smaller interest rate cut. Read the full article here.

Analyst Warns of Stagflation After Fed’s Rate Cut

Following the Federal Reserve’s deep 50 basis-point cut to its Fed funds rate, an analyst warned of a return of recession along with stagnation. GLJ Research's Gordon Johnson stated, "Get ready for stagnation," adding that this is the "inflation is Transitory" mistake all over again. Read the full article here.

Ray Dalio Highlights Challenges for the Fed

Billionaire investor Ray Dalio pointed out the difficulties faced by the U.S. Federal Reserve as it navigates interest rate cuts amid a heavily indebted economy. Dalio emphasized that the Fed must balance keeping interest rates high enough to benefit creditors while not excessively burdening debtors. Read the full article here.

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This story was generated using Benzinga Neuro and edited by Navdeep Yadav.