Radhika Rao On Fed Rate Cut | Powell Warns Of Inflation & Jobs Risk

The US Federal Reserve has cut interest rates for the first time in nine months, delivering a 25 basis point cut in an 11-1 vote. While Donald Trump had pushed for sharper cuts, Fed Chair Jerome Powell cautioned that risks to inflation remain on the upside while employment faces downside pressure. Markets initially cheered the move, but Powell’s comments suggested the Fed is not as dovish as expected. Radhika Rao, DBS Banks says the Fed is walking a fine line between a weakening labor market and higher inflation, with tariff impacts likely to show up in the coming months. She adds that while markets are pricing in aggressive cuts, the Fed is signaling a more cautious path, with the dollar expected to soften gradually into year-end.