Tangle Podcast: "What to make of the Fed's interest rate cut"

Host: Isaac Saul
Episode Date: September 18, 2025

Episode Overview

This episode of Tangle explores the Federal Reserve’s recent decision to cut interest rates by 0.25%, the first such move in nine months. The podcast examines the arguments from both the political left and right, unpacks the growing debate over the Fed’s independence amid President Trump’s interventions, and features Managing Editor Ari Weitzman’s perspective on these issues. The episode also includes a reader question about U.S.-China relations and under-the-radar news stories.

Key Discussion Points & Insights

1. Context and Correction (Isaac Saul)

• Isaac begins with a commitment to transparency, issuing a correction regarding Senator Chris Coons' state of representation (Delaware, not Connecticut) [03:09].
• Notes that the team is in transit, so Will is handling the main story and Ari is delivering his editorial take and the reader question [04:00].

2. News Quick Hits (Will)

• Updates include police-involved shootings, ABC pulling Jimmy Kimmel’s show, vaccine schedule testimony, a failed measure to censure Ilhan Omar, and a deportation order for activist Mahmoud Khalil [04:18-06:02].

3. The Fed’s Interest Rate Cut: What Happened?

[06:02-09:43]

• Announcement:
  The FOMC voted 11-1 to cut rates by 0.25% (now 4%-4.25%), their first cut in nine months.
• Reason:
  Weaker labor market data, with concerns about ongoing potential inflation.
• Future Outlook:
  Two more rate cuts may be coming this year, but nothing is guaranteed—a “meeting by meeting” approach, according to Fed Chair Jerome Powell.
• Key Dissent:
  Stephen Myron—on leave from the White House Council of Economic Advisors to join the Fed—wanted a larger 0.5% cut.
• Political Pressure:
  President Trump has pushed for more drastic rate reductions, even threatening to fire Powell and attempting to fire Fed Governor Lisa Cook for alleged mortgage fraud. An appellate court blocked Cook’s removal, preserving her vote.
• Economic Context:
  Bureau of Labor Statistics August jobs report showed lower than expected job growth (22,000) and a slight uptick in unemployment (4.3%). Job numbers for the previous year were revised down by 911,000.

Notable Quote:

"Uncertainty about the economic outlook remains elevated...the Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that would impede the attainment of the committee's goals."
— FOMC Statement [07:20]

"The market slowing in both the supply of and the demand for workers is unusual in this less dynamic and somewhat softer labor market. The downside risks to employment appear to have risen."
— Jerome Powell [07:54]

4. Perspectives from Across the Political Spectrum

[10:45-18:57]

The Left’s View

• Overall Stance:
  Generally not opposed to the cut but worries about Trump pressuring for more and its effect on Fed independence.
• Skepticism:
  Many believe the cut won't lower prices; Trump’s efforts to force more cuts could have dire long-term impacts.
• Fed Independence Under Threat:
  Fears over the firing attempt against Lisa Cook and the influence of Stephen Myron as a potential Trump proxy.

Notable Quotes:

"A quarter percent rate cut won’t fulfill Trump’s personal wish for a return to the era of easy money, which is to say will probably deepen the rift between Trump and Fed chair Jerome Powell."
— Will Gottsegan, The Atlantic [11:16]

"Trump has used his platform to aggressively lobby for 1 percentage [point] interest rates that economists and market participants widely understand to be extremely unwise."
— Jonathan Levin, Bloomberg [12:25]

"The Fed has run out of ways to reconcile high employment with low inflation. Both indicators have been worsening..."
— Robert Kutner, American Prospect [13:28]

The Right’s View

• Overall Stance:
  No major objections to the cut, with some arguing it was overdue, but concerns about the state of the economy are prevalent.
• Political Ownership:
  Emphasis that Trump now “owns” the outcome of Fed policy and the consequences for inflation and growth.
• Critique of Data:
  Questions linger about the reliability of jobs data and Powell’s leadership.

Notable Quotes:

"President Trump wants to lower interest rates, and on Wednesday he got his wish...Mr. Trump now owns that, too."
— Wall Street Journal editorial board [14:38]

"The Federal Reserve governors finally ran out of excuses after the jobs market data turned out to be massively cooked over the last two years."
— Ed Morrissey, Hot Air [15:31]

"A minor change to the federal funds rate will neither meaningfully help nor hurt the economy... Monetary policy is not as important as other market forces."
— J. Kedia, Cato [17:12]

5. Ari Weitzman’s Take: The Mainstream View is Vindicated

[19:03-25:29]

Summary

• Mainstream Predictions Came True:
  The cut was in line with expectations; Trump’s dissatisfaction and appointment of Myron proceeded as analysts predicted. The attempt to fire Cook failed due to lack of evidence, as anticipated.
• Fed Independence Under Fire:
  Ari highlights the threat to the Fed’s independence from executive overreach, citing the Cook firing attempt and Myron’s dual role in the White House and Fed.
• Dangers of Politicizing the Fed:
  Argues that public and media now treat Fed members with political party labels (“red and blue bars”)—a sign that polarization has seeped into even this institution.
• Personal Admiration:
  Ari praises the deliberative process and sober communication of the Fed, warning that effective monetary policy requires insulation from political interference.

Notable Quotes:

"The main story coming out of the FOMC's rate cut decision is the ongoing assault on the committee's independence, which the recent and expected rate cut does not come close to resolving." [21:49]

"Simply put, for [an] economic system, which is the strongest the world has ever seen, to continue to function, it needs an independent Federal Reserve. This latest rate cut shows that we do still have it, but it also shows the President assuring us that he doesn’t care if we lose it." [25:14]

6. Reader Question: Is China an Enemy of the United States?

[26:46-29:59]

Discussion Highlights:

• The U.S. and China are not existential enemies but are rivals for global influence, particularly given ideological differences, human rights concerns, and Taiwan.
• Economic interdependence complicates the relationship: China is a major supplier and a buyer of U.S. debt.
• The biggest risks stem from supply chain dependence (especially on Taiwanese semiconductors) and China’s growing influence.
• The “enemy” narrative is mostly about rivalry, not imminent military conflict or true existential danger.

Notable Quote:

"Does that make China an existential threat? Probably not, but they aren’t particularly close to being an ally either." [29:20]

7. Under-the-Radar Story & Numbers

[29:59-33:05]

• News: The Justice Department discreetly removed a study showing far right extremists have caused more ideologically motivated homicides than far left extremists.
• FOMC Voting Details: Data on how Federal Reserve members set target rate ranges, and President Trump’s desired rates.
• Economic Projections: The median expected GDP growth for 2025 is 1.6%; expected unemployment is 4.5%.

8. Memorable Moments & Quotes

• On Trump’s Influence:
  “If Trump eventually does somehow cow Fed officials into drastically lowering rates, the result would likely have lasting consequences – a boom in the near term and a bust in the long term.”
  — Will Gottsegan, The Atlantic [11:41]

• On Fed Independence:
  "Board members casting votes under the shadow of potential dismissals erodes that independence."
  — Ari Weitzman [24:20]

• On the Fed’s Institutional Role:
  “The Fed has to carefully balance its dual mandate of stimulating economic growth while containing inflation, and it simply cannot do that if it’s under the gun of the administration.”
  — Ari Weitzman [24:51]

Timestamps for Key Segments

• Correction & Overview – [02:50–04:00]
• Quick Hits – [04:18–06:02]
• The Fed Rate Cut Explainer – [06:02–09:43]
• Arguments from the Left & Right – [10:45–18:57]
• Ari Weitzman’s Take – [19:03–25:29]
• Reader Question: U.S.-China Tensions – [26:46–29:59]
• Under-the-Radar News & Stats – [29:59–33:05]

Tone & Style Highlights

The episode maintains Tangle’s signature independent, analytical, and nonpartisan approach, mixing straightforward explanations with nuanced discussion from various political perspectives. Ari Weitzman’s editorial closes with genuine concern for the institutional independence of the Federal Reserve, delivered with a blend of seriousness and gentle wit that characterizes Tangle’s style.

This summary captures all key points, notable quotations, and insights from the substantive sections of the episode for listeners who missed it or need a quick yet comprehensive reference.