he Federal Reserve’s latest act of stunning and cowardly malpractice. The Fed has just announced a pathetic, minuscule 25 basis point rate cut, a move that is grossly inadequate in the face of a rapidly collapsing labor market. In his own press conference, Fed Chairman Jerome Powell openly admitted that the jobs market is “really cooling” and faces “meaningful downside risks,” but has deliberately chosen to do almost nothing about it. This is not caution; this is a dereliction of duty and an act of class warfare.
The Public Confession of a Central Banker
The most damning part of the entire event was the profound contradiction between Powell’s words and his actions.
The Confession: Powell’s language was a five-alarm fire. He acknowledged that the labor market is “no longer solid.” He admitted that job growth is now “below the break-even rate.” He stated that the “downside risks to unemployment have risen” and are “now a reality.” He even casually dismissed the historic 1.2 million downward revision in jobs data as something the Fed “expected.” He is telling you, out loud, that he sees the car heading directly for a cliff.
The Inaction: His response to this imminent catastrophe? A tiny 0.25% rate cut, with “no widespread support” among his colleagues for anything more aggressive. He is lightly tapping the brakes while the economy careens towards a jobs recession.
This is not a man who is confused or moving cautiously. This is a man who is publicly confessing that he sees the disaster coming and is choosing to let it happen.
The Fed’s Real Mandate: Disciplining Labor
So, why the inaction? The answer is simple: the Fed’s supposed “dual mandate” of promoting maximum employment and stable prices is a lie. Its real, unstated mandate is to protect the interests of the creditor and capitalist class.
From their perspective, a little unemployment is a good thing. It serves to discipline the workforce, suppress wage growth, and break the power of labor. The Fed is deliberately and consciously risking a massive jobs recession, which will disproportionately devastate the most vulnerable communities—as we are already seeing with the Black unemployment rate spiking 1.5% to 7.5%, a leading indicator of a recession—all to combat a waning threat of inflation. They are choosing to sacrifice millions of workers’ jobs to protect the value of rich people’s assets.
“Too Late” by Design
The financial media has labeled Jerome Powell “Mr. Too Late,” predicting he will fail to act in time to prevent a recession. This framing misunderstands the goal. He will not be “too late” by accident; he will be “too late” by design.
The strategy is clear: allow the labor market to collapse. Wait until millions are unemployed, businesses are failing, and the crisis is undeniable. Only then will the Fed ride in as the supposed “savior” with the massive, aggressive rate cuts that are needed right now.
But those future cuts won’t be for the workers who have already lost their jobs and homes. They will be a massive bailout for the stock and bond markets, a flood of cheap money to protect the portfolios of the rich from the consequences of the very recession the Fed helped orchestrate.
The Fed’s latest meeting was a moment of terrifying clarity. It was a demonstration of a captured institution deliberately choosing to protect the interests of the oligarchy over the livelihoods of the working class. Jerome Powell is not Mr. Too Late. He is Mr. Exactly-on-Schedule for a managed demolition of the American labor market.
Discover more from Brokeonomics.news
Subscribe to get the latest posts sent to your email.
