The United States has entered a new phase of economic management, one where the central bank is no longer focused solely on taming inflation but on cushioning a labour market that shows the first signs of fatigue. The quarter-point reduction in the benchmark lending rate, bringing it down to a range of 4 to 4.25 per cent, is more than a routine adjustment. It signals a recognition that growth is slowing and that the risk of job losses now outweighs the threat of runaway prices.

For nearly two years, the dominant concern was inflation. Aggressive rate hikes were justified as the only way to cool an overheated post-pandemic economy. Those efforts have paid off to some extent: consumer prices have fallen from their earlier peaks and supply chain pressures have eased. Yet inflation has not disappeared. At 2.9 per cent over the past year, it remains above the long-term target. Ordinarily, such numbers........

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