The Fed’s cut was 'more hawkish than anticipated,' Moody’s Zandi says

Federal Reserve policymakers delivered a quarter-point interest-rate cut this week, but leading economist Mark Zandi warns the move carries a more hawkish signal than markets had anticipated.

Speaking to Fortune after the announcement, Zandi described the Fed’s messaging as tightrope-walking between economic risks—aiming to manage dangers to job growth while signaling no rush into further cuts.

Zandi said the rate cut “was right down the strike zone,” matching expectations for a 25-basis-point move that brings the benchmark federal funds rate to a range of 4% to 4.25%. However, “it was a more hawkish cut than anticipated,” he said, citing Jerome Powell’s explanation that the move was about managing “downside risks” to weakness in the job cycle, rather than launching a new cycle of rapi