Groundwork’s Jacquez Says Fed’s Rate Cut Acknowledges the Fact That American Consumers are Out of Options
Groundwork’s Jacquez Says Fed’s Rate Cut Acknowledges the Fact That American Consumers are Out of Options
Today, the Federal Reserve cut the federal funds rate by 25 basis points to a target range of 3.75% to 4%. The decision reflects mounting concern that the U.S. economy is in decline, as job growth stalls, household spending weakens for most families, the housing market remains stuck, and inflation remains persistently above the Fed’s 2% target.
Alex Jacquez, Chief of Policy and Advocacy at the Groundwork Collaborative, shared his reaction:
“The Fed’s decision only confirms what Americans already know — the economy is slowing, job growth has stalled, prices keep climbing, and consumers are pulling back because they’re out of options. Trump’s reckless economic agenda is pushing our economy to the brink, and working families are paying the price.”
ADDITIONAL ANALYSIS
- The Federal Reserve still sees a stagflationary environment. Fed Chair Jerome Powell’s statement noted that recent economic indicators are consistent with slower job growth and rising unemployment, while inflation moves up and remains elevated.
- There is widespread anxiety in the economy. The Fed’s latest Beige Book found that consumers are pulling back and businesses are halting hiring and investments. The Beige Book cited “elevated economic uncertainty,” “weaker demand,” and “muted hiring” among businesses across the country as lower- and middle-income families turn to coupons and their savings to cover the rising prices of essentials.
- A weak economy drove the Fed’s decision to cut rates. The macroeconomic picture is forcing the Fed to walk a tightrope, carefully balancing the risks of rising unemployment, persistent inflation, and slowing growth.
- Manufacturing remains stuck in a slump, hiring has nearly stalled, and consumer sentiment is at its lowest level since 2022.
- The AI capex boom is masking a fragile economy. Pantheon Macroeconomics estimates that without AI-driven spending and stock market gains, growth in the first half of 2025 would have been closer to 1%, revealing a startling picture under the hood of headline numbers.
- Trump’s agenda is hurting American businesses and consumers alike. Despite his promises to lower prices and create jobs, President Trump’s broad and chaotic tariff regime has made supply chains volatile, driven up prices, and discouraged business investment.
- Household debt and delinquencies remain near record highs. Cutting rates may ease borrowing costs slightly, but it will not solve the underlying reasons that force households to lean on debt in the first place.
- In just a matter of days, cuts to programs like the Affordable Care Act and the Supplemental Nutrition Assistance Programs that help millions of Americans afford health care and groceries, will go into effect. Trump and Republicans in Congress are sitting idly by as these price hikes pummel Americans.
- The bottom line: The Fed is cutting rates to cushion the blow of Trump’s faltering economy — but monetary policy alone can’t fix the damage caused by the President’s chaos.
