SUMMARY

In September, the Federal Reserve cut interest rates for the first time in four years with an aggressive move that lowered its benchmark rate by a half percentage point. The Fed also said it intended to lower interest rates by a full point before the year is out. Amna Nawaz discussed the decision and what it could mean, with David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy.

View the transcript of the story.

News alternative: Check out recent segments from the NewsHour, and choose the story you’re most interested in watching. You can make a Google doc copy of discussion questions that work for any of the stories here.

Key terms

inflation — the increase in cost of goods and services, including housing, energy and food prices.

Federal Reserve — a federal body that sets the cost of borrowing money from the federal government. The Federal Reserve changes the cost of borrowing in order to manage inflation or stimulate the economy.

WARM-UP QUESTIONS

1. Who is Jerome Powell?
2. What role does the Federal Reserve have in managing the economy?
3. When did the Federal Reserve begin lowering interest rates? When had the Federal Reserve previously begun to raise the rates?
4. Why has the Federal Reserve decided to lower interest rates now?
5. How does the interest rate set by the Federal Reserve impact the prices that consumers pay?

FOCUS QUESTIONS

Voters have listed the economy and inflation as some of their greatest concerns ahead of the 2024 election. Do you think this decision by the Federal Reserve will have an impact on voters' decisions? Why or why not?

Media literacy: Where could you go to find out more about how people in the U.S. think about the economy?

Alternative: See, Think, Wonder: What did you notice? What did the story make you think? What would you want to learn more about?

FOR MORE

What students can do: Read the following articles from the Associated Press, and then discuss —

• What signs do you think economists look for to determine whether the economy is healthy or not?
• What about the public?
• Do you think economists and most citizens have different views on the economy?

"U.S. inflation drops to lowest point in 3 years at 2.4 percent, some price pressures remain"

"Abortion passes inflation as top election concern for women under 30, survey finds"

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