WASHINGTON, Sept. 18 (Xinhua) -- The U.S. Federal Reserve's rate cut could be good for the economy in the short term but lead to more inflation down the road, U.S. analysts have warned.

The central bank has slashed interest rates for the first time since December and signaled that more rate cuts are likely to occur this year.

The cut, announced Wednesday, amounted to a quarter point, in line with analysts' expectations, at a time when U.S. President Donald Trump has been pressing the Fed to cut rates to spur economic growth.

The Fed said the move was a bid to ignite the slowing jobs market, signaling that a weakening labor market is now a greater concern than inflation.

Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua, "For people who are living paycheck to paycheck, I think the Fed's quarter-point cut was the best decision that could have been made."

"Inflation is a little above their target, but the employment situation is definitely freezing up ... The Fed has only so much room to do the right thing, but they leaned toward jobs," Ramsay said.

The Fed has a dual mandate to keep inflation at 2 percent and care for the job market.

Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, said he sees more cuts down the road, likely 75-100 basis points in the months ahead.

However, that could come as tariffs raise inflation, he said.

"My view is that the tariffs will kick in ... and raise inflation. Fed policy will not be a brake on the process," Hufbauer told Xinhua, referring to Trump's sweeping tariffs on all trading partners.

"Basically, I think the Fed will accommodate inflation in the 3 percent to 4 percent range over the next few years," Hufbauer said.

Dean Baker, co-founder of the Center for Economic and Policy Research, said he sees further cuts down the road.

"It's very likely we will see the two cuts the Fed indicated likely in their projections. The labor market is weakening and I think that will be the major factor," Baker said.

The rate cuts will have a "modestly positive impact on growth, mostly through the housing market and increased mortgage refinancing," Baker said.

"However, the pass-through of tariffs, which is happening, will mean more inflation independent of anything the Fed does," the analyst added.

Any inflation caused by the rate cuts could potentially harm Trump, at a time when the Republican Party holds the White House and both chambers of Congress.

"In the short run, the rate cuts will benefit the economy because it reduces borrowing costs, improves economic growth, and creates more jobs," Brookings Institution Senior Fellow Darrell West told Xinhua.

"But there is a risk that too many rate reductions will juice the economy and increase inflation. Higher inflation would be bad for Trump because he promised to lower costs for his supporters," West said.

Christopher Galdieri, a political science professor at Saint Anselm College in the northeastern state of New Hampshire, said, "Hits from inflation are more likely to rattle folks who were unenthusiastic Trump voters in 2024 but voted for him out of lingering party loyalty or anger over inflation."

"The main effect of inflation could be to maintain the status quo and make it harder for Trump to win higher approval ratings," Galdieri said.

(Source: Xinhua)