The U.S. Federal Reserve's latest rate cut was a "risk management type of move" driven by concerns about a stalling labor market, according to Mike Archbold, a trustee of the U.S.-based non-profit Committee for Economic Development. The Federal Reserve on Wednesday lowered the target range for the federal funds interest rate by 25 basis points to 3.75 to 4 percent, marking its second rate cut this year. Interest rates are often used to either spur economic activity or to curb rising prices. Rate cuts typically boost hiring by lowering employers' financing costs but also worsen inflation by injecting more money into the market. "It's interesting because the Fed is really dealing with the tug between its dual mandate of both maximum employment and stable pricing, right? And they're more worried right now about the maximum employment than they are about stable pricing, which is why we're seeing what is really an insurance, a risk management type of move to cut the 25 basis points, which is very different than what the Fed has been in the past, which if you recall, we always used to hear the words 'data dependent'. Now it's more about the perceived downside risk to the labor market and they want to really focus on that," Archbold explained during a TV interview on Wednesday. The expert said that news such as Amazon's mass layoffs just on Tuesday contributed to the Fed decision, but called for more attention to the country's small and medium sized companies. "I think it's just one of the many factors that would weigh in. But I think it's important to keep in mind that the vast majority of job creation in the United States is really from small and medium sized businesses. So while the big businesses are the ones that get all the headlines, it's really the small businesses that are in the position to be creating jobs going forward. And interestingly, those businesses, the small and medium sized businesses, are more sensitive to the short-term rates than they are to the long-term rates," said Archbold. The latest decision to lower the interest rate despite the fact that the current inflation rate for consumer prices is well above the Fed's 2 percent target shows that tackling inflation will take a backseat for now, as the employment issue is much more urgent, said the expert. "It really is that tug of war between these conflicting mandates of the Fed. And right now I think that they're, they don't see as much of a risk for inflation ticking up as they do concern about the labor market. You're right to point out that the inflation is still beyond the Fed's target of wanting 2 percent, but it's still in and around the 3 percent rate. It's not out of control, It's certainly down from what it was and it's really more about that perceived risk going forward that the Fed is concerned about," said Archbold. SHOTLIST: FILE: Philadelphia, USA - Oct 2024 1. U.S. national flag; New York City, USA - Oct 29, 2025 2. SOUNDBITE (English) Mike Archbold, Trustee of Committee for Economic Development (ending with shots 3-6): "It's interesting because the Fed is really dealing with the tug between its dual mandate of both maximum employment and stable pricing, right? And they're more worried right now about the maximum employment than they are about stable pricing, which is why we're seeing what is really an insurance, a risk management type of move to cut the 25 basis points, which is very different than what the Fed has been in the past, which if you recall, we always used to hear the words 'data dependent'. Now it's more about the perceived downside risk to the labor market and they want to really focus on that."; FILE: Washington D.C., USA - Date Unknown 3. Various of U.S. Federal Reserve building; national flag of United States, flag of Federal Reserve; FILE: Savannah City, Georgia, USA - Nov 12, 2021 4. Various of hiring notices; FILE: Miami, Florida, USA - 2025 5. Various of consumers in supermarket; FILE: Westbury, New York State, USA - Aug 1, 2025 6. Various of customers shopping for goods, goods on shelves; New York City, USA - Oct 29, 2025 7. SOUNDBITE (English) Mike Archbold, Trustee of Committee for Economic Development (starting with shot 6/ending with shots 8-11): "I think it's just one of the many factors that would weigh in. But I think it's important to keep in mind that the vast majority of job creation in the United States is really from small and medium sized businesses. So while the big businesses are the ones that get all the headlines, it's really the small businesses that are in the position to be creating jobs going forward. And interestingly, those businesses, the small and medium sized businesses, are more sensitive to the short-term rates than they are to the long-term rates."; FILE: California, USA - Date Unknown 8. Logo of Amazon; FILE: Crystal City, Colorado, USA - Sept 2019 9. Various of Amazon Thornton Fulfillment Center, conveyor belt sorting packages; FILE: USA - Exact Location and Date Unknown 10. Various of bus production line; FILE: North Las Vegas, USA - 2022 11. Various of workers working, machine operating on production line; New York City, USA - Oct 29, 2025 12. SOUNDBITE (English) Mike Archbold, Trustee of Committee for Economic Development (starting with shot 11/ending with shots 13-14): "It really is that tug of war between these conflicting mandates of the Fed. And right now I think that they're, they don't see as much of a risk for inflation ticking up as they do concern about the labor market. You're right to point out that the inflation is still beyond the Fed's target of wanting 2 percent, but it's still in and around the 3 percent rate. It's not out of control. It's certainly down from what it was and it's really more about that perceived risk going forward that the Fed is concerned about."; FILE: Racine, Wisconsin State, USA - Dec 2019 13. Various of workers in farming equipment factory; FILE: Washington D.C., USA - June 2022 14. Various of man refueling cars at gas station; screen showing gas prices; FILE: New York City, USA - October 2024 15. Traffic; 16. City view; 17. Various of port scene; Statue of Liberty. [Restrictions: No access Chinese mainland]