Rebecca Patterson, Oren Cass, Jason Furman and Lawrence H. Summers
Ms. Patterson is an economist who has held senior roles at JPMorgan Chase and Bridgewater Associates. Mr. Cass, Dr. Furman and Dr. Summers are economists and contributing Opinion writers.
Matthew Rose, an Opinion editorial director, hosted an online conversation with four economists to discuss Wednesday’s Federal Reserve meeting and the state of the economy.
Matthew Rose: The Federal Reserve met this week and the least interesting thing it did was cut interest rates. This may rank as one of the oddest meetings in recent memory. It’s the first since the president tried to fire a Fed governor, Lisa Cook. It featured the first appearance by a Trump-appointed governor, Stephen Miran. And it’s the latest test for the chairman, Jerome Powell, who is facing attacks from the president, an array of contradictory economic signals and a very public contest to succeed him.
Stepping way back, what is your one big takeaway?
Lawrence H. Summers: Sometimes markets do better than is deserved based on the quality of policy. Between tariffs, wholesale attacks on Fed independence, deficits and attacks on the rule of law, there is much basis for uncertainty about our economic future.
Rebecca Patterson: The Fed’s decision this week and Mr. Powell’s news conference highlighted a really important divergence in the U.S. economy. While overall economic growth has been fine, it is masking very different experiences for different parts of the population. High-income earners with homes and equities have rising levels of wealth and continue to spend. But young people just out of college, lower-income earners and retirees on fixed incomes are increasingly struggling, given high and still-rising prices, a stagnant job market and a lack of housing supply. The Fed is trying to thread this needle: manage risk to the job market without exacerbating inflation pressures.
Jason Furman: My strongest takeaway was a little bit of relief on our worst fears about the Federal Reserve losing its independence. I was really encouraged that two people President Trump appointed in his first term, Michelle Bowman and Christopher Waller, both voted with the committee rather than dissenting and calling for a larger cut. This despite the fact that they have every incentive to flatter Mr. Trump, who is considering them, among others, for Federal Reserve chair. As long as the two of them want to keep the Fed independent, and I have every reason to think they are both serious people who care about the institution, it will likely stay that way.
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