In an opinion piece in the New York Times titled “Inflation Is Ebbing. Now the Fed Must Protect Jobs,” the inventor of Sahm’s Rule Claudia Sahm said the 0.5 percentage point cut in policy interest rate by the Federal Reserve signifies a change in the central bank’s strategy towards managing inflation and employment. What Happened: The rate cut brings the federal funds rate to a target range of 4.75 percent to 5 percent, inching closer to pre-pandemic levels. The Fed’s decision indicates a shift from its focus on inflation, which has been on a downward trend for the past two years, to strengthe…
