This episode of Banking on Connections features James Hotchkiss discussing the Federal Reserve’s September rate cut and its impact on the economy. The conversation centers on the Fed’s decision to lower the federal funds rate by 25 basis points, signaling a shift in monetary policy as inflation cools and the labor market slows.
Key points include:


The Fed’s move reduces recession risks and reflects growing concern about the jobs market, with hiring slowing but layoffs remaining low.


Uncertainty around tariffs and rates continues to affect business investment and consumer sentiment, especially for small businesses.


The housing market shows regional differences: inventory is high in the South but remains tight in the Midwest and Northeast, with Chicago seeing strong price appreciation.


The Fed is now prioritizing employment over inflation, willing to let inflation run hotter to support job growth.


The episode closes with a look at how these changes may affect long-term rates, housing affordability, and consumer confidence as we move through 2025.

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