Fed Chair Jerome Powell framed the move as a "risk management" action, citing emerging signs of weakness in the U.S. labor market, despite the unemployment rate standing at a relatively healthy 4.3% in August 2025. This scenario, where the Fed eases policy amid low unemployment, prompts an examination of past "adjustment" cycles and their implications for financial markets. Historical Precedent for the Fed's "Adjustment Cuts" Since the 1970s, the Federal Reserve has implemented a rate cut, viewed as an "adjustment" or "risk management" measure, only twice when the unemployment rate was below 4.6%: in 1998 and ... (full story)