Economists call the Fed interest rate cut an ‘unwise decision’

The Federal Reserve’s quarter-point rate cut was too little for Wall Street — and too much for some economists.

“The Fed’s decision today is like in the days when doctors bled their patients to heal them,” Chris Rupkey, chief financial economist at MUFG Union Bank, said Wednesday, calling the cut an “unwise decision.”

The Fed “manufactur[ed] reasons to cut interest rates despite a strong economy with no recession signs apparent anywhere out on the horizon,” Rupkey chided.

Indeed, unemployment stands near a 50-year low of 3.7 percent and personal incomes have been rising steadily over the last few years, according to data released Tuesday by the Bureau of Economic Analysis.

On Tuesday, the BEA said it revised US personal incomes upward by $47.9 billion, or 0.3 percent, in 2017, and $249.6 billion, or 1.4 percent, in 2018.

The wages picture grows dimmer, however, when factoring out added income from newly created jobs, said Jared Bernstein, former chief economist and economic adviser to former Vice President Joe Biden.

“As long as you’ve got more people working, that number is going to go up,” Bernstein said of the BEA’s figures. “What you really want to do is look at hourly wages.”

And while wages are still increasing, the rate of growth has slowed since hitting 3.4 percent in February, according to the Labor Department.

Powell defended Wednesday’s cut, saying that the Fed has been getting feedback from people in low- and moderate-income communities who are only now feeling that they’re in a better labor market — despite more than 10 years of economic expansion.

“My view is the best thing we can do is sustain the expansion, keep it going,” Powell said.