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The Federal Reserve announced that it slashed interest rates for the second time this year amid rising unemployment and increasing inflation<\/a>. <\/p>\n The Federal Open Market Committee released its statement on Wednesday saying that it would slash interest rates by a quarter of a percentage point. <\/p>\n Conditions in the labor market appea to be gradually cooling and inflation remains somewhat elevated,\u201d a Chairman Jerome Powell said.<\/p>\n The announcement comes amid a time of uncertainty for the central bank. Due to the government shutdown, the Bureau of Labor Statistics did not release its monthly jobs report. It likely will miss an additional jobs report in November should the government remain closed. <\/p>\n \u201cThe shutdown of the federal government will weigh on economic activity while it persists, but these effects should reverse once the shutdown ends,\u201d Powell said. <\/p>\n Powell also discussed the effects of President Donald Trump\u2019s across-the-board reciprocal tariffs have also caused prices for goods to increase.<\/p>\n \u201cHigher tariffs are pushing up prices in some categories of goods, resulting in higher overall inflation,\u201d he said. Powell said it might be reasonable to say that price increases will be relatively short-lived. <\/p>\n \u201cBut it is also possible that the inflationary effects could instead be more persistent and that is a risk to be assessed and managed,\u201d he said. <\/p>\n That complicates the Federal Reserve\u2019s ability to determine whether to raise interest rates, lower them or keep them the same. The Federal Reserve\u2019s Board of Governors has to balance its dual mandate to keep inflation low while not causing high unemployment.<\/p>\n Powell outlined the challenge given job growth has slowed down significantly in recent months while prices continue to rise. <\/p>\n \u201cIn the near term, risks to inflation are tilted to the upside, and risks to employment to the downside\u2013a challenging situation,\u201d he said. \u201cThere is no risk-free path for policy as we navigate this tension between our employment and inflation goals.\u201d<\/p>\n In addition, the Trump administration has repeatedly targeted Federal Reserve Chairman Jerome Powell, whom President Donald Trump has labeled a \u201cstupid person<\/a>\u201d for not slashing interest rates. <\/p>\n