Just coming in right now. The Federal Reserve has announced a half a point. That was not the most expected. Most of what i read was a Quarter Point expected. It was a toss up, and really heres the thing, the Federal Reserve raised Interest Rates to get inflation down. The more recent readings we have gotten on the economy the last six weeks since the last time they announced decision is pointing to a weakness in the labor department. To cut into unemployment and make more people get out of jobs or increase unemployment further, well, thats the reason why they wanted to dramatically cut Interest Rates. They decided to do so by half a Percentage Point. Economic activity has continued to expand at a solid pace. Job gains have slowed. Well have to see what Fed Chair Jerome powell says to explain cutting Interest Rates by a Half Point. Im going to ask the Control Room if we can get a ticker and keep an eye on whats going on with the stock market. Its going wild . There we go. Ran insana, the markets like it, what say you . Exactly. There were some large bets placed at The End of last week, amid expectations the fed could go the Half Point they just did and cut rates by that much, amid expectations that will cut expectations by 2025. We need to put this through a different prism. The fed is trying to normalize Interest Rates because inflation has fallen so much from its peak of 9. 1 as measured by Consumer Prices down to the current 2 , and likely to fall further. The feds got a lot of latitude to lower Interest Rates further. They are acknowledging this, acknowledging what was recently said about the Weakening Labor Market data we have gotten over the last several months, the downward revisions in the jobs created in the last year or so. The economy is in good shape but the fed is trying to, as we like to say in our business, stick the soft landing, do what something many Federal Reserves in the past have failed to do, which is to raise Interest Rates, kill inflation, slow the economy but not throw it into a recession, and thats what theyre hoping to do here. Lets note its 2 56 now, but in a single minute, the dow jumped 300 points. That tells you something. Ron, i mean, here was the case for a smaller cut, right . There was concern that it would help avoid too much economic acceleration that might keep prices rising, that might cause inflation to remain slightly too high. Does that worry you at all . Not in the least. Inflation is likely to keep falling, chris. When we look at things like energy prices, which are falling not just on, you know, hefty supplies being produced here in the united states, but weakening chinese demand. Oil prices, which go directly to Consumer Pocket books in the way of gasoline have been plunging, except the last couple of days. Grocery Price Inflation has slowed meaningfully. Inflation is down substantially, as i mentioned earlier. The likelihood of a reacceleration in inflation, based on the fed, normalizing Interest Rates, not stimulating the economy but bringing rates down where they should be, in an Inflation Environment of 2 1 2 versus 9 , this is what the fed should be doing, and again, keeps the economy from weakening too much going into next year. The fed, again, trying to avoid creating an unnecessary recession when they could effectively do this and potentially make that soft landing a reality. I want to bring in peter baker, New York Times chief white House Correspondent and msnbc political analyst. Peter, where this economy is going will impact Joe Bidens legacy, but of course the immediate question is about Kamala Harriss campaign. Does it help consumer sentiment, which in spite of the many gains that Ron Insana just talked about by the administration, its remained a negative, and it is also the most important issue for voters. So for Kamala Harris, the stakes here are high. Yeah, the stakes are high, and this is clearly the move that she would have wanted to happen today, certainly its only positive for her. Whether it makes a huge difference, thats unknown. History shows that peoples feelings about the economy, visavis elections are baked in months beforehand, you know, typically by june or july, the electorate pretty much made its decision when it comes to how it feels the economy is in terms of making its choice for a president ial election in the fall. But this is an unusual year. Its an unusual moment, and the economy is such a Center Piece of Trumps Argument against harris that she now has something to answer. Especially if this helps on housing, which has been one of the biggest frustrations for many americans. Democrats have been pushing the fed to do this for a while now, and progressives in particular, certainly have wanted an even bigger Rate Cut. They were arguing for. 75 , the people who were talking about it earlier this week, Elizabeth Warren, john hickenlooper, sheldon whitehouse, they urged the fed to cut it by 75 basis points. But what do you think this means for democrats in november and Kamala Harris in particular . Well, its interesting that ron used a Gymnastics Metaphor about sticking the soft landing. Ill use a Track And Field metaphor, i feel like in a lot of ways, this is wind at the back of the Harris Walz Campaign as theyre running down the home stretch, right . Were in the month of september. Early voting starts very very soon, and so you have early voting september and october, leading into november the 5th, and, yes, its true. I agree with peter that, a lot of what americans feel about the economy is baked in already. But i think that an economy that looks like it has improved tremendously from the crash that Donald Trump led and when he was in charge, and mishandling the pandemic, that Crash And Recovery has happened, and now the wind is at the back of the Harris Walz Campaign as we head into the actual Election Day. I think that the economy is the number one issue, but if signs are pointing in the right direction, voters are very much going to internalize that, chris. So the same argument that we have been having for a while now, but with another huge data point, right, eugene with these Interest Rates and the question becomes before the voters had heard over and over and over again about the data points, about the ways in which the Job Market was so much stronger, the way in which inflation was coming down, the investment that this administration had made in things like infrastructure, the plans that Kamala Harris had going forward, and yet the polls werent exactly overwhelmingly in her favor. Do we think that people are going to take a look at the Interest Rate Decision by the fed, and say now, you know what, i think this is the final sort of piece of the puzzle that we needed to make me vote for her . Maybe. I mean, i think Peter Nodding is correct, and also they may internalize it, there are going to be those people. The issue has not been the macroeconomics or the data, right . For a while the biden administration has been talking about the data has been pointing to low unemployment, low inflation, and voters still do not see the economy as working for them. Vice president harris knows this. She knows and her team is very aware that they have to convince people, they have to change peoples feelings around the economy, right . So its less about whether people wake up or look at the News Today and say, oh, wait, this is really good, this feels like a soft landing because most voters arent thinking that way. Its up to the democrats, Vice President harris to convince people that this is a signal, right, and this is part of the a larger signal. They Cant Talk about it in terms of data points, right . They have to be able to point to lowering prices in x, Y And Z category so voters can feel that. Vice president harris has talked about housing quite a bit. She has to convince people maybe you might be able to think about buying a house, that some of the folks who were staying in their first house might go to their second house, some of those renters can leave lower renting prices, right . The cost of groceries would go down. Yesterday, i was on a panel with other reporters with Vice President harris, and she talked about the ways in which she thought things were better from the last four years, and she was very clear, she said, the prices are too high for groceries, right . So they understand that the feelings are more important than the data at The End of the day for voters. Im glad you brought that up. Great job, by the way, you and your fellow panelists in the Q A with Vice President harris. Let me play part of what she said. This was the key section what she was asked about the economy. I dont think it is sufficient to just only talk about economic policy around reducing unemployment. Do people have an opportunity to build wealth . If thats what they choose to do. If thats what they want to do. And a lot of my perspective as we go forward is just that. I believe that there are a lot of opportunities that are available to the american people if we just see if we see people and understand what they want for themselves and their families, and then meet them where they are. I dont know anybody who doesnt want to build, brian, at least some wealth. I guess the question becomes, as were putting this in the context of this campaign, how quickly people might see some of the results of this. Mortgage rates were coming down in anticipation of this. But Credit Card debt, will Mortgage Rates come down even more so that some people will say you know what, maybe now that house is within reach. Between now, where are we at Control Room . 48 days now . 48 days until the election, brian. I dont know if its wednesday. How quick will they see something . Yeah, i mean, more quickly for some things than others. Its an important point that you bring up, Mortgage Rates, Credit Card rates, these are all things tied to what the Federal Reserve is doing. Not necessarily one for one. The Federal Reserve cut Interest Rates by half a percent today. That doesnt mean the 30year fixed Mortgage Rate is down half a Percentage Point compared to ten minutes ago. It could take a few months for Credit Card rates and Auto Loan rates to come down. Mortgage rates have had this leading expectation that the Federal Reserve was going to do this. We have to remember, Mortgage Rates were somewhere around 8 in october of last year. Theyre somewhere around 6. 2 now. That relief has come to prospective home buyers. The bigger thing when it comes to the federal Reserve Announcement is its the Central Bank coming from the protection of the Labor Market. The bigger thing is not how much are you and i paying on Credit Cards, its a result of do people lose jobs undually. Thats the reason why the statement they just released codifies in there, theyre paying minds and making sure they can protect the Labor Market and get their goal of maximum employment, which is the feds rebate. On one hand. In addition to also keeping prices allow and calling inflation. The vote was 111, Ron Insana, the only person who voted not to cut rates by a half Percentage Point was Michelle Bowman who preferred to lower the Target Range for federal funds by 1 4 Percentage Point at this meeting. Now that its a half, is it still just the beginning . Could, for example, voters in the next 48 days see another Rate Cut . No, the fed is six weeks away. Its possible before the election that the fed will go, lets see, its going to occur around the election date. The fed meetings are every six weeks. I dont know off the top of my head what the date is for the next meeting. We widely expect the fed to not endanger in a one and done, but continue lowering Interest Rates, not just through the remainder of this year, but lower by a full Percentage Point, if not a Percentage Point and a half in 2024, and another full Percentage Point in 2025 to ensure that the economy doesnt unnecessarily slip into a recession as a inflation fight, certainly in my estimation has been won. Youre now trying to support the economy. So, you know, i would ignore, just as we look at the markets on the screen, the first reactions to fed decisions generally speaking on wall street, are not the ones that last the long egs. Longest. Theres a lot of thinking and analyzing going on right now, the feds more worried about the economy than theyre letting on. 3 4 point would have been that. Thats why they didnt do it. But whats really going on here is the fed is just in the process of bringing Interest Rates down to a level that matches where inflation currently is, and so, you know, the one dissent for a Quarter Point, we expected someone to dissent, its the first time since they have started raising Interest Rates that we have seen a dissent, first time in a while that someone has gone in a different direction. It shows theres a rigorous debate inside the fed. By and large, its widely expected that this process of Rate Cutting is going to continue well into 2025. I did some quick research and by research, i mean i stared at Brian Cheung and turns out the research has shown me there will not be another Rate Cut, another fed meeting until after the election, so thank you for that, wikipedia. Can i go back to the idea of what this might mean for the election, peter. One of the things that has struck me is the intensity with which this campaign has really Micro Targeted. Look, we all know what a small number of voters will decide this election and a small number of states. When i think of the micro Targeting And Anybody whos been on the Campaign Trail and talked to young voters. Theres a question about will young Voters Vote in record numbers. Theres been a lot of attention with them. Theyre the ones saying, i dont know if ill be able to buy a home. May have run up Credit Card debt. I wonder if this in any way impacts the messaging in the campaign or the way they Micro Target certain constituencies. That may mean some of the people who were in those Blue Wall states that were slipping away when Joe Biden was looking like the nominee. Yeah, i think thats possible, and obviously youll see on president bidens schedule, he plans tomorrow to give a speech to the economic club of washington, he reached out and wanted to give a talk about the economy, where it is now, before this decision was made, and obviously knowing this decision was about to be made, and it wouldnt surprise me if he wants to use it to take a little bit of a victory lap. Eugenes point is right. People dont look at numbers, not when they make up their minds about how they feel about the economy. They havent given biden much credit, the fact that inflation is 2. 5 . Even though inflation has come down, prices havent come down. They have plateaued. They havent come back down, and nobody wants deflation. At the Grocery Store, youre paying a lot. Housing costs will come down as a result. It may not be fast enough that people make Voting Decisions based on their own sort of general feeling about where the economy is, and theres a lagging indicator between the time the economy does better and when people feel it in their lives in a way that makes a difference in an election campaign. 1992, president george h. W. Bush was in trouble with the electorate because of the recession, but the recession ended by the time Election Day happened, it didnt benefit him. It was too late to change public perceptions, and i think that, you know, well see, maybe this is different. Theyre going to Micro Target, as you say, and make the case that theyre on the right path and things are going well. Dont worry about the economy so much. But, you know, i think we ought to be cautious in assuming a major impact. Lets talk about maybe the bigger economic picture if we can for a minute. One of the things Kamala Harris has been doing is being very specific about the kinds of plans shes proposing with wide approval, particularly among americans who are worried about the economy from, you know, raising the amount of Child Tax credits to significantly increasing the amount of aid available to somebody who wants to start a small business. Having said that, after the debate, which virtually everyone said she won, if you talk to voters, i read all the voters that talked to the New York Times, for example, peters paper, one of the questions is how are we going to pay for it . What are the details . Hillary clinton says one of my criticisms was that i gave too many details, but does the Vice President need to tell people more about what shes going to do . Are these broad suggestions enough . I think shes up against somebody who doesnt give much detail at all on any policy, chris, and so i think that the trouble with giving all the details to your plans is then you have all the details out there, and people are going to rip your plan apart. I think back to the 2020 campaign with Elizabeth Warren in the democratic primary. It does allow for people to rip that apart. Im not saying you shouldnt give as much detail as possible. When youre running against Donald Trump, you give enough information so people understand what you are trying to do and how it will benefit their lives, while also contrasting the fact that Donald Trumps entire plan is more Tax Cuts for rich people and corporations, and a tariff that will raise taxes on everybody, and exacerbating the deficit by trilli