In the latest episode of The Excerpt podcast: Paul Davidson, the Economics and Jobs Reporter at YSL News, explains the implications of the Fed’s rate cut on the economy. In Lebanon, there’s growing tension following a series of handheld device explosions. YSL News White House Correspondent Joey Garrison analyzes the Teamsters’ decision not to support Kamala Harris or Donald Trump, considering its impact on the upcoming election. The FBI shares new details about a hack of the Trump campaign while Iran intensifies its efforts to interfere in the 2024 election. Additionally, the CDC reports concerningly high flu-related deaths in children as vaccination rates decline.

Taylor Wilson:

Hello everyone, I’m Taylor Wilson, and today is Thursday, September 19th, 2024. You’re listening to The Excerpt. Today, we discuss the recent half-point cut in the Fed’s key interest rate. What does it mean for the economy? We’ll also cover the recent disturbances in Lebanon and the decision by the Teamsters to withhold their endorsement from both Harris and Trump. What could this imply for the upcoming election?

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Yesterday, the Federal Reserve announced a reduction of its key interest rate by half a percentage point, marking its first rate cut in four years. I spoke with YSL News’s Paul Davidson to help clarify the significance of this decision. Paul, thanks for joining us on The Excerpt.

Paul Davidson:

Glad to be here, Taylor. Thank you for having me.

Taylor Wilson:

So Paul, what did the Federal Reserve decide regarding its key interest rate yesterday?

Paul Davidson:

The Federal Reserve opted to cut its key interest rate by a substantial half percentage point. They essentially had a choice between a half-point cut and a quarter-point cut, and they chose the larger reduction. This is significant as it’s the first rate cut in four years. The key rate influences various other rates across the economy, including those for mortgages, credit cards, auto loans, and corporate bonds. Overall, this was a landmark decision. The Fed had been increasing rates rapidly during the inflation surge after COVID-19, but since inflation has started to decline, the Fed has shifted gears to begin lowering rates to stimulate the economy and the job market.

Taylor Wilson:

Was this move unexpected, and what were the factors driving this decision, Paul?

Paul Davidson:

It really depends on who you ask. Coming into the meeting, the probabilities were fairly balanced. The futures markets had begun indicating a larger half-point cut, yet many economic research organizations were still predicting a more cautious quarter-point cut since the Fed had been hesitant to lower rates too early. They wanted to ensure inflation was under control first, so their approach has been quite prudent. I wouldn’t say it was shocking, as many markets were leaning towards the larger cut, transitioning to favor boosting the economy rather than solely focusing on curbing inflation. However, it likely surprised those who perceive the Fed as conservative due to recent high inflation trends.

Taylor Wilson:

Looking ahead, what forecasts does the Fed have for further cuts this year and into 2025?

Paul Davidson:

While the Fed made a significant initial cut of half a percentage point, it’s not expecting to replicate this aggressive approach in future meetings. Instead, they plan to adopt a more measured pace. For the upcoming sessions in November and December, they’re likely to reduce rates by a quarter point, with an overall expectation of a total cut of about one percentage point over the next year. They aim for continued reductions as inflation trends down toward their target and to maintain stability in the job market and broader economy. Essentially, while they start strong, they intend to exercise more caution afterward, as they believe the job market and economy remain relatively healthy, but they want to avoid any downside risks.

Taylor Wilson:

What does all this really mean for inflation, the job market, and the overall economic landscape right now?

Paul Davidson:

The Fed is aiming for what they call a “soft landing.” This approach involves carefully boosting interest rates to counteract inflation without triggering a recession. They’re trying to fine-tune this process, managing rates to neither hike them too aggressively nor withdraw too quickly. This balance is challenging as previous rate hikes to curb inflation have historically led to recessions. However, it appears the Fed is successfully navigating this period, ensuring high rates can continue to help drive down inflation.

At the same time, the Fed is taking proactive steps to uplift the economy and stock market as the job market shows signs of instability. Their goal is to keep the job market from deteriorating and the economy stable. The overarching aim is for a favorable outcome, though there are no guarantees. The decision to lower rates now poses the risk of reigniting inflation, and if the cuts aren’t swift enough, the job market might suffer, possibly leading to higher unemployment rates. Nevertheless, the Fed is optimistic about successfully managing these challenges.

Taylor Wilson:

With the election just weeks away, have we seen any reactions from the political sphere following this Fed announcement?

Paul Davidson:

As expected, Democratic leaders have been advocating for lower rates from the Fed for quite some time. Figures like Elizabeth Warren and other Democrats argue that the existing rates have been excessively high for too long, asserting that inflation.

There’s been a decline, and there’s been increasing pressure on the Federal Reserve to lower interest rates sooner. This move could potentially stimulate the economy and benefit the Biden administration, as it could support Vice President Harris’s campaign. However, Republicans argue that the Fed shouldn’t be cutting rates so close to the upcoming election as it might give an unfair advantage to the current administration. They believe the Federal Reserve is inadvertently assisting the incumbents. On the contrary, Fed Chair Powell and other officials have strongly asserted that politics do not influence their decisions. They focus solely on economic assistance, aiming to support Americans and consumers by deciding it’s time to cut interest rates. With inflation nearing the Fed’s target and a slight weakening in the job market, they felt it appropriate to act.

Taylor Wilson:

Paul, thank you for your insightful analysis. Paul Davidson reports on economics and employment for YSL News. Appreciate your insights, Paul.

Paul Davidson:

Thanks, Taylor. Glad to help.

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Yesterday, handheld radios utilized by Hezbollah exploded in southern Lebanon. The health ministry reported 20 fatalities and over 450 injuries in the suburbs of Beirut and other locations, while the death toll from earlier explosions on Tuesday has risen to 12. Both Lebanon’s government and Hezbollah, the Iran-aligned group operating within the country, accused Israel of being behind the attacks on wireless communication devices. The blasts resulted in many individuals suffering from severe injuries, including loss of limbs and serious abdominal wounds. Although Israel has not officially commented on the attacks targeting Hezbollah communications, various reports indicate that the operation was executed by its intelligence agency, Mossad.

This series of attacks coincides with Israel’s ongoing conflict in Gaza and the escalating tensions along its border with Lebanon, raising fears of a broader regional conflict. Israel and Hezbollah have a long-standing adversarial relationship, highlighted by a major war in 2006, and the recent flare-up of cross-border skirmishes has been exacerbated by the war in Gaza. Following Hamas’s attack on Israel on October 7th, many Israelis in northern regions have been forced to evacuate due to frequent deadly missile strikes from Hezbollah. Additionally, Israel’s defense minister has announced the country’s transition into a new phase in its conflict with Hamas in Gaza.

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The International Brotherhood of Teamsters Union announced yesterday that it will not support either Vice President Kamala Harris or former President Donald Trump in the upcoming presidential election. I had a discussion with YSL News White House correspondent Joey Garrison for further details.

Hi there, Joey.

Joey Garrison:

Hi, doing well!

Taylor Wilson:

Glad to hear it, Joey. Let’s begin with the Teamsters’ decision. What led to this outcome?

Joey Garrison:

The Teamsters have been indecisive about endorsing a candidate for months. On Wednesday, they finally made their position clear: they will not endorse anyone in the 2024 presidential election. Initially, they withheld their endorsement when Joe Biden was the presumptive Democratic nominee, and that neutral stance continued. They met with Kamala Harris, the Democratic nominee, for the first time on Monday, but still chose not to back her. This union typically supports Democratic candidates, but they have endorsed Republicans at times in the past, such as George H.W. Bush in 1988, Reagan, and Nixon. Not endorsing a Democrat, especially one campaigning on union support, is significant in this election.

Sean O’Brien, the Teamsters president, made headlines in July when he spoke at the Republican National Convention in Milwaukee, marking a historical first for the union in a 121-year history. This move sparked frustration among many Democrats, who have worked with the union on various pro-labor issues, but it also signaled a shift away from traditional alignment with Democratic candidates.

Taylor Wilson:

In terms of the election’s dynamics, Joey, does this development have a greater negative impact on Harris than on Trump?

Joey Garrison:

This situation certainly puts Harris at a disadvantage. She, like Biden, has emphasized her credentials with unions and has received the backing of nine out of the ten largest labor unions, including the UAW and major teachers’ unions. The Teamsters’ decision is particularly crucial in key battleground states like Pennsylvania, Wisconsin, and Michigan, where union membership remains relevant, despite its decrease. Interestingly, prior to announcing their decision, the Teamsters released polling data indicating that their members favor Trump over Harris: 58% support Trump while only 31% back Harris. This discrepancy is noteworthy, as unions traditionally endorse Democratic candidates, indicating a significant shift in member opinions.

Taylor Wilson:

How are the two campaigns reacting to this decision? How are they framing it?

Joey Garrison:

The Harris campaign is emphasizing local Teamsters unions that have decided to endorse her, highlighting this as a break from the National Union’s stance. I’ve been receiving press releases from her campaign almost every half-hour since the announcement, noting these endorsements, arguing that while they may not have secured the national endorsement, Kamala Harris remains the pro-union candidate between the two. In contrast, the Trump campaign is focusing on the polling data I mentioned earlier, asserting that “even though the Teamsters’ executive board hasn’t made a formal endorsement, the majority of the rank-and-file workers” desire Trump back in the presidency.

This union represents a diverse range of blue-collar jobs, including truck drivers and freight workers, making it a vital voter demographic that both candidates are keen to win over, especially in those three key states. However, it’s likely that many of these individuals have already formed their opinions, so significant shifts in polling may not be expected as a direct result of this decision.

The endorsement from the Teamsters would have been a significant advantage, especially for the Harris campaign when it comes to campaign setup, support, and similar aspects.

Taylor Wilson:

Indeed, quite intriguing. Joey Garrison, a White House correspondent with YSL News, joins us. Thank you, Joey.

Joey Garrison:

Thanks for having me!

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Taylor Wilson:

Iranian hackers have targeted individuals linked to President Joe Biden’s campaign, sending them unsolicited information stolen from former President Donald Trump’s campaign, according to reports from the FBI and other federal agencies. This revelation is part of ongoing warnings from federal cybersecurity officials regarding Iran’s attempts to interfere in the upcoming elections, including actions aimed specifically at leaking details about Trump’s campaign. There is evidence that these activities are retaliation for decisions made by the former president during his administration, such as the assassination of Qasem Soleimani, a general in the Islamic Revolutionary Guard Corps.

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Federally health officials are sounding alarms about a concerning rise in child fatalities associated with the flu. The recent season recorded nearly 200 child deaths due to influenza-related complications for the ’23-’24 season, as reported by the CDC. This total of 199 fatalities matches the figures from the 2019-2020 flu season. The peak death toll occurred in the 2009-2010 season with 288 child fatalities during the H1N1 pandemic. Most of the affected children had access to vaccines but did not get vaccinated. Research indicates that although annual flu shots do not guarantee immunity, they significantly reduce the risk of severe illness.

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It has been close to ten years since the Sexual Assault Kit Initiative began, a somewhat new grant program aimed at addressing the longstanding issue of untested sexual assault kits. Approximately $350 million in grants have been allocated to 90 local and state agencies across the United States, yet for many survivors of sexual assault, the initiative has not fulfilled its promise of justice. Numerous kits remain untested, and even among those that were analyzed, few led to convictions. YSL News investigative reporter Tricia Nadolny discussed her year and a half investigation into the challenges surrounding America’s rape kit backlog with my co-host Dana Taylor. You can catch this episode on our feed after 4:00 PM Eastern Time today.

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Thank you for tuning into The Excerpt. You can listen to the podcast on any platform where you typically get your podcasts, and if you have a smart speaker, simply say, “Play The Excerpt.” I’m Taylor Wilson, and I’ll be back tomorrow with more insights from YSL News.