By Kyrylo Shevchenko, Photo by RDNE Stock project
Yesterday, the Federal Reserve cut rates by 25 bps — its first step toward policy easing since late 2024.
From the perspective of the dual mandate (maximum employment + price stability), this was a well-balanced decision.
The labor market is cooling, and employment risks are rising.
Inflation remains above target but continues to ease.
A deeper cut was possible, but it would have signaled a serious policy misalignment — a message the Fed clearly did not want to send.
Bottom line: the Committee did as much as possible at this stage without undermining its commitment to price stability. For markets, this is a positive signal: the Fed is ready to support the economy, but it is proceeding cautiously.
I look forward to further rate cuts — gradual and measured — that will help revive the U.S. economy without reigniting overheating risks
About the Author
Kyrylo Shevchenko is a devoted father, proud Ukrainian who was the Chief of the National Bank of Ukraine (July 2020-October 2022). A Banker/Financier with 30 years of experience, Kyrylo maintains his cool amongst immense pressure and challenges. He successfully managed war time crisis during the February 2022 Russian-Ukraine conflict, while sustaining banking system in an interrupted mode.