Why the Federal Reserve wants to avoid an aggressive rate cut

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  NPR. This is The Indicator from Planet Money.

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  I'm Paddy Hirsch.

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  And I'm Adrian Ma.

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  It's an exciting week for The Indicator

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  because we find out tomorrow how much the Federal Reserve will cut interest rates.

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  And while it looks like there will be a cut, it's not clear just how deep that cut will be.

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  Now, the smart money, the analysts and Wall Street types,

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  they're predicting maybe a quarter of a percentage point cut, or maybe a half a percentage point.

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  Well, who knows?

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  But however deep the Fed goes, it probably won't be deep enough for President Trump.

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  On his social media platform, TruthSocial, a couple of months ago,

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  Trump wrote, Fed should cut rates by three points.

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  Very low inflation, $1 trillion a year would be saved.

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  Were there any exclamation points there?

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  Oh, yes.

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  Three.

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  Three exclamation points for, I guess, a requested 3 percentage point reduction.

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  Or maybe if you want to be fancy about it, call it 300 basis points.

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  We're fancy.

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  And, you know, a cut of that size would take the Fed funds rate from 4.5% today to just 1.5%.

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