“The upside risks to inflation have really come down, and the downside risks to employment have increased,” Federal Reserve Chairman Jerome Powell stated Sept. 18 when announcing that the Board of Governors of the Federal Reserve System, this nation’s central bank, had finally decided to lower the interest rate by half a point.
The board cut the benchmark interest rate last week to a range of 4.5%-4.75%.
In May 2020, the national inflation rate was 0.2% and the Fed’s interest rate was a mere 0.05%. By June 2022 the inflation rate had peaked at 9.1%, and by August 2023 the Fed had boosted the interest rate to a 23-year high of 5.33%, where it remained for a year in order to choke off inflation.
The action succeeded. Inflation had been tamped down to 2.9% in July 2024.
Furthermore, the Fed’s decisions on reining in inflation have resulted in a “soft landing” rather than triggering a recession.
For example, firsttime claims filed in Oklahoma for unemployment benefits averaged 1,306 per week during the first eight months of this year. The biggest number of claims submitted in that period was 3,089 during the week of Feb. 17, while the lowest number of initial claims was filed less than a month later: 1,124 the week of March 9.
The U.S. Department of Labor announced on Sept. 19 that first-time unemployment claims filed in Oklahoma during the week of Sept. 14 totaled 1,097, a dozen fewer than the week before. The number of continuing claims filed in Oklahoma the week of Sept. 7 for jobless benefits totaled 9,447, which was 250 fewer than were filed the previous week, according to the Labor Department.
The day after the Federal Reserve’s announcement the S&P 500 stock market climbed to a record high.
However, not all of the economic news was rosy. Rent prices and evictions remain high in Oklahoma.