The Federal Reserve announced a surprise rate cut on Wednesday, October 29, marking its third reduction this year despite lingering inflation risks and a lack of recent economic data due to a government-mandated blackout period. Analysts say the move aims to counterbalance slowing job growth linked to rapid AI adoption across industries.
The decision highlights growing concerns about AI's disruptive impact on labor markets, particularly in Asia's manufacturing and tech sectors. While the Fed emphasized its commitment to 'sustaining U.S. economic momentum,' Asian markets showed mixed reactions, with Japan's Nikkei rising 0.8% while Shanghai Composite dipped 0.3%.
Business leaders warn the rate cuts could complicate monetary policy coordination with Asian central banks. 'This creates ripple effects for export-driven economies,' said Singapore-based economist Li Wei. 'Countries like South Korea and Vietnam must now balance currency stability against shifting U.S. capital flows.'
The data blackout period, which prevented Fed officials from commenting on economic indicators for three weeks prior to the meeting, has raised questions about decision-making transparency. Some experts suggest AI-powered predictive models may have filled information gaps during the silence.
