From the New York Times unlike above all, this is today, The? U S, economy is in the middle, The historic So why is the government now deploying an economic what it last year during the financial crisis plus last night? democratic debate? It's Thursday August first read your. I come in hey. I C span where it's out for a federal reserve announcements ah it'll be on

channel man on Wednesday afternoon it over economics reporter Ben Castle, stopped by the studio C span, will have the whole thing. I said that I will give an answer them so then give us a limit of contacts are or waiting for to the FED announced twenty eight minutes ago that it is cutting interest rates for the first time since the financial crisis they caught a quarter percentage point which sound seems very, very small truly but makes a very big difference. There had been some talk. They might go crazy and caught a half a percentage point, but they didn't go grace. Ok, we are now waiting to hear J power. All the FED chair come out and talk to us about why they did that and what that means, and what everybody's me listening for is any hint of what happens and was there a lot of debate around my decision? There has been a lot of

paid in the months leading up to this, because on the surface, the economy right now is pretty good right. The unemployment rate is close to a five a cave wow. This is now the longest economic expansion in american history we have been adding jobs for in April, nine years straight now? Wages are rising and things are pretty good and normally the FED cause rates when These are bad or when is worried, things are getting bad and so the world people who looked at that answer. Why would the FED be taking action now when the economy is in pretty good shape? In fact, often in a situation like this, you might expect the FED to be raising interest rates, try to keep the economy from overheating. But they're looking out there in their seeing a lot of things to be worried about in the future and are basically trying to take out an insurance policy here and make sure that we don't go over the edge so, there are real differences of opinion. It sounds like about whether the federal government should intervene in this,

oh man, and were waiting to hear what the FED chief drone POW says about. Why they did it. That's right. The federal reserve announcing today its cutting interest rates by a quarter of per cent. Ok, pointless and building a new conference live on, sees king Gos, traumas up and I'll, discuss the thinking behind today's interest rate reduction and then turn to as forward as the year began, both the economy and monetary policy were in a good place. The unemployment rate was below four percent. Inflation had been running near our two percent objective is making me it's been good case. That's exactly right. Over the first half of the year, the economy grew a healthy pace and job gains pushed unemployment to near half century low, so we're waiting for a bus or waiting for about it will come people who live and work in low and middle income communities. Tell us that many who have struggled to find work are now getting opportunities to add new and better

actors to their lives, but we're listing for his. How big is the but the median committee participants assessments of the neutral rate of interest in the long run, normal rate of unemployment have also decline. This year I won't You, the fireworks for meeting these changes in the anticipated path of interest rates, have eased financial conditions and absent when the economy are. We sure that we want this to be a full episode of the daily, that only you can do it. I, but manufacturing output has declined for two consecutive quarters, but is this fixed investment fell in the second quarter. Does the downside that the downside foreign growth has disappointed Gillian manufacturing and notably in the Euro area and China, what cases he making her he's, making a case that there is a lot of uncertainty right now, and that there are signs that the global economy is slowing and that might be starting to affect the. U S is why, after simmering early in the year, trade policy tensions nearly boiled over in May and June

and that that is making businesses nervous about what the future looks like. Looking through this variability, our business contacts tell that the ongoing uncertainty is making some companies more cautious about their capital spending, and that's may be a sign that the economy is not as strong as some of these other measures might suggest were mindful that inflation returned to two percent may be further delayed and that continued below target inflation could lead to a worrisome and difficult to reverse downward slide and longer term expect Patients is the sense that the FED needs to taking all insure against things. Getting worse is not just that things are weaker overseas as they could get weaker still does not just that there's a trade war is the trade war could get. Worse than the FED would rather give the economies for a little bit of a kick now best. So the has some momentum in case things get worse. Rather than waiting for things to actually slow down

ending, to give it a bigger shoved to get things moving. It will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain expansion with a strong labour market inflationary symmetric, two percent objective flick. Let's have your own vocabulary. There is absolutely a fed vocabulary it. So thank you for that all crystal clear to us that yeah Christie Crystal you're, like a leg of opaque window, so with a really basic question. What is the role of the Senate in Amerika was the role of its leader in among likeness. The FED is our primary tool for trying to keep the economy and a good place it's as simple as that they have two missions. They are meant to try to maintain maximum employment today,

We keep unemployment as low as possible and price stability to try to avoid living inflation, get out of control and their main too for dealing with. That is interesting and tell me how that works, so the FED basically sets the interest rates. There then used to decide everything else through the economy. What you're mortgage rate is gonna, be what companies that want to borrow money in order to investor, to hire more workers, what they're gonna pay when interest rates are low, it's cheap to borrow as that encourages, but to borrow more and to spend more, and it helps the economy go fast. The risk is if it goes too fast and we start to see inflation prices go up and they start going up, so asked. The vat can become a really big problem in the economy. Right. We saw this in this country in the seventies want to one let that happen. So if the economies have to go too fast or try to tap the brakes and slow it down

by raising the interest rate, which raises the cost of borrowing which raises the price of things like your mortgage or your credit card. Go that's right or for a business they'll be less likely to borrow money slightly less likely to keep investing will be less likely to hire me workers and it'll slow things down. Ok, so it's been how long, since we did this last since the middle of a recession more than a decade ago, ok, help us understand how we got to this moment today, where the Federal Reserve decided to lower interest rates for the first time since them, so in the middle of the financial crisis, the FED had to act aggressively to try to basically keep the economy from pitching into the great depression. Again they cut interest rates as far as they could all the way to zero zero two zero, which means what exactly it means. Essentially,

for the safest borrowers they could borrow money for practically nothing. There is essential cost free borrowing, money. That's right, I mean no actual Human beings are borrow money for literally zero, but it was as cheap as money could be. If you wanted to borrow money, you can have it and what's the rationale

that did the economy was in really bad shape and they needed to find some way to encourage businesses to invest consumers to spend to try to get things moving again, and they went to length that the FED has never gone too before to try to make that happen, and it worked in the sense that the economy began to get better. The unemployment rate got as high as ten percent it began to fall, jobs had been getting caught at the rate of hundreds of thousands a month they began to increase incomes, gradually begin to go back up right, corporate profits, rebounded the stock market rebounded and what's happening to that interest rate as that recovery. Gains for most of that period. Nothing at all. It stayed at zero. Four years, even though the economy was starting to see, some signs of improvement

wasn't enough that the FED felt that they could start to raise interest rates, and when does that start to change? So, finally, at the end of twenty fifty good afternoon the FED raises rates. Earlier today, the federal Open Market Committee decided to raise the target range for the federal funds rate by one quarter percentage point a quarter point bringing it to one quarter to one half per cent: the smallest possible increase. They could make another kind of vote of confidence in the health of the account. That's right, the economy was finally starting to return to normal is, I will explain the process of normalizing interest rates is likely

proceed gradually may actually talked about it. They talked about it that way as normalization did, they were trying to get back to a period where interest rates were no longer near zero. They were the way we think about interest rates when it actually costs money. To borrow a get, this action marks the end of an extraordinary seven year period, during which the federal funds rate was filled near zero to support the recovery of the economy from the worst financial crisis in recession since the great depression. So they raise interest rates by four point: nine, and they do it again, and they do it again and they do it again. They ventured do at nine times over that period from when you fifteen, until just last year. Eventually rates were basically at two and a quarter to two and a half points, still very, very low by historic standards. But more normal compared to where they had been in the middle of recession and after

and of all these gradual interest rate increases, where does the economy stand? for the economy. Right now is good. There are a lot of caviar. We can go through a lot of those not me out, but on a basic level. The economy right now is in good shape, will get back. Hi I'm Kristen minds are, and I'm the cost of innovation uncovered anew podcast the world. Changing in real time, often in ways we don't notice an can't, protect innovation, and covered explores the breakthroughs that our driving our culture now from how we play what we consume to how we can act, learn more what the ideas that are reshaping our reality in extraordinary way as enemies,

uncovered is upon cast from invest, go cute! You too, and t brand at the New York Times listened today in basque or distributors ink. Then I think we should go through those caviar for just a moment. This has felt a bit like a funny more in the economy, because many Americans see that the economy is doing well, but there is also a pretty pervasive sense of insecurity. Does authority angles right? I think that it help to step back and think about what we even mean when we say how is the economy do so one way to think about that

economy doing right now, do people have jobs? Do they have incomes that are sufficient to pay for their needs and for their desires, and in that sense things right now are looking really good, but there are concerns about where things are and sort of a larger context, and I think that's some of what you're picking up on, which is ok, I have a job but is it enough to set aside money for retirement? I have a job, but is it enough to pay off my students, louts? Am I we're gonna be able to buy a house and my confident them Job is not gonna, be lost to a robot, or an algorithm order, one worker oversea soon, and that I think it s getting to this sort of larger quest Jim of whether this economy is working for the average person, if you own stocks, you're doing great

If you were just relying on wage and come not so much, and if you art further down to the bottom of the latter. If you have less education, if you are part of a country where there are a lot of good jobs, if you are black, or brown or an immigrant. You may very well be working a job. That's part time that mean on offer health insurance where you may be a gig worker who is not an employee at all for those people, this economy doesn't feel like it's working, and so they can, Could this and say I hear the unemployment rate is low. And I believe that I can get a job, but it doesn't feel like I can afford that sort of middle class life that I might have anticipated too, with that in mind. What are we to make of this decision by the FED just thirty five minutes ago, to cut the interest rates so The conventional wisdom has been that all that stuff I was just saying about,

long run and inequality and all of those concerns the conventional wisdom has been. None of that is something the federal even be thinking about. They are thinking about how is the economy doing today and where is it going over the next couple of years? But I think there was a really interesting moment in the press conference. How will made a point where he said earlier this year when things were going so well, we were seeing wage growth, especially at the bottom, and there's been a bit of a shift in the way that the fund has been thinking over the last several years, where there's a recognition that in periods of a really strong economy, the benefits often flowed disproportionately to people at the bottom, to the exact same people that we ve been saying

have been left behind in a lot of the recovery. It helps people to buy that's right and there's a pretty simple reason for that when the economy is really strong and especially when the unemployment rate is really low, it gives bargaining power to people who don't normally have it. So we ve written stories about people with criminal records, getting jobs, people with disabilities, getting jobs. People have been out of the workforce for a really long time, getting jobs or being on demand better pay companies offering training. We saw just you day, Amazon announced a big training programme, because there say we can't find the people that we really want to hire so will hire other people and will train them up, will give the, skills and will pay the more as a result. So, when unemployment is low and the economy generally well the most vile honourable members of our economy suddenly have more leverage and greater opportunity. That's exactly right and what power was saying there is. This is finally happened.

Why would we let it end? We should do everything we can to try to keep this going. While we can, because it's finally benefiting the people who didn't benefit for such a long time and because we're in that moment. Right now, that kind of moment were the unemployment rate is really love and it's starting to help people at the bottom. Keeping things going for longer, at least in theory, will help those people at the bottom. More, and maybe some of that even lasts when you call me eventually does slow. Similar benefits will stick around, so even

the faroes represent see its job is kind of socio economic engineering fixing the income inequality in this country using the interest rate. Cod is in a way designed to try to fix that. That's right that the FED has faced a lot of criticism for a long time for thinking mostly about people at the top for helping Wall Street for helping finance and not thinking about the way that its policies flow through the hole There have been groups that have been pushing, saying: hey, don't get over stressed about inflation, don't get too worried about what's happening, a Wall Street think about how your policies affect people who are often left out of the economy and the way to help them is to let the economy

get hot hotter, maybe than the FED in the past would have been comfortable and how, to some extent as saying I'm buying into that at least to some degree, and it may not be his overriding goal, but its baked in to how the Federal Reserve bathed on Wednesday that's exactly right, then everything you just said makes me think that, we can't we don't pretty well. The federal reserve wants to keep it that way, but that it sees signs of storm clouds. So does everything that happened today? Pretty much mean that soon enough there is going to be some sort of problem in the economy. Some sort of recession is. Is that kind of what happened today that we were, Fifthly, put on notice that the good times are probably gonna come to an end in the near future, so there are sort of two paths you could think about here. One is now but we ve gone from a period where we are raising interest rates to a period warmer cutting interest rates with officially crossed.

Were the peak and now we're on the way down. That's one interpretation that were going into a cutting cycle into a downturn that the FED has to respond to there's another possibility, which is what the fittest hoping is happening here, which is that the FED is just trying to nudge the economy along so that it. We have to take those more aggressive moves down the road, and we don't know yet which of those two paths were all the feds can be why during those numbers very very closely to try to figure out whether it needs to keep cutting or whether it can get by with a cut or two and just keep the economy coming. When will we know economist almost? Never see a recession coming ahead of time. The best they can do is no that we are in a recession. Now the fairies

trying to prevent us from falling into one. We won't know if they succeeded until we look up one day and we say we're in a recession or we are talking in six months. It was a man we're not in recession. That's right! So that's honour on some level. If the feds succeeds We may never know. We will never know exactly what would have happened in the economy if the FED had not taken this action to show. If we dont found or recession will never be able to play it back through without the cod and say, would we have gone into recession if it weren't for the FED bright because, like you said, the fetters very subtle, they Thank you back thanks. So much we'll be right,

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trying to restructure society. Well, I am, from the opening moments of Wednesday night Democratic debate, the leading candidates onstage former vice President Joe Biden and Senator Camilla Harris were repeatedly attacked by them. On it. As guardians of the status quo on issues from health care to immigration, what did you mean when you sad when a woman works outside the home, it's resulting in both the deteriorate family, no one that we are avoiding these are quotes. There was the title of the bad and that just causes concern for me, because we know America's women are working.

You said it delivers wasn't. Has I want our senator here? There is no longer believes that I'm just thinking as ever believed that a lot better Harris please respond. Much of the main focus was on by in a series of pointed exchanges, Senator Houston, deliberate former housing Secretary Kuelian Castro and Senator Corey Booker, challenged Biden on his past record and current positions. The fact is, there is a lot dont, but here's the deal. The fact is that we're talking about things that occurred a long long time ago, and now, all of a sudden, you know I booth Biden. Harris defended their records against what they said or unfair and inaccurate attacks. He's talking about how terrible I am on these issues- Rocco Obama, Jack, who I was he had had ten lawyers, do a background check and everything about and civil rights and civil liberties Eddie

This means that it was the best decision, and I gave it survives exactly MR yeah, that's it for the daily I'm likable borrow see tomorrow.