A Divided Fed Cuts Rates Again—but Why?

The central bank predicts faster economic growth in 2026 but still eases again

WSJ editorial. Excerpts:

"When the rate cuts began more than a year ago, officials predicted they’d get inflation back to the Fed’s 2% target by 2026. That deadline keeps getting pushed back, and in the Summary of Economic Projections released with Wednesday’s policy decisions, the 2% arrival date is now 2028."

"Mr. Powell says this isn’t quantitative easing to achieve lower interest rates or economic growth. They believe they need to expand their asset holdings to match the level of reserve deposits commercial banks are likely to want to hold. But it’s a reminder that the Fed’s post-2008 “ample reserves” policy framework probably will require the Fed to be a net purchaser of Treasurys forever. Remember when this extraordinary Fed intervention in financial markets was going to be temporary?"