ACTV - Weekly Economic Pulse: A Goldilocks Rate Cut

2025-09-25 12:08:00 ET

The Federal Reserve cut their target for the federal funds rate by 25 basis points last week due to concerns about labor market weakness. Job creation has certainly been weak the last 3 or 4 months but that is largely due to the uncertainty created by the Trump administration’s haphazard implementation of their economic program. Well, not entirely. It is also due to the economic program itself, if you include immigration in that category and I certainly do. Contrary to the administration’s claims, immigration is a net positive for the economy and there is no evidence that immigrants take jobs from American citizens. There may be reasons to limit immigration but economic growth is not one of them. Growth is a function of workforce growth and productivity growth. The Trump economic bet has always been that they can get enough of the latter to offset their stifling of the former. Unfortunately, kicking immigrants out is quick and investing to raise productivity is not. So, the economy has slowed and the Fed, like everyone else, sees this in the economic data, especially the employment data....

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