The latest interest rate cut by the US Federal Reserve should have been a routine step in a predictable easing cycle. Instead, it has exposed the increasingly fragile state of America’s monetary policymaking. Beneath the technical language of quarter-point adjustments lies a deeper struggle: a central bank trying to navigate a slowing labour market, persistent inflation, and an unusually charged political backdrop ~ all while operating with incomplete data and widening internal divisions. At the heart of the problem is the Fed’s dual mandate. Normally, the goals of stable prices and low unemployment move in roughly the same direction. Today, they do not.

Inflation is still running above target, even if not surging. Meanwhile, the job market is losing steam, with unemployment ticking up and business sentiment weakening. When the Fed cuts rates to support jobs, it risks worsening inflation; when........

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