Wall Street got the big rate cut it wanted, but markets failed to support the rally. The Federal Reserve on Wednesday cut its key overnight lending rate by half a percentage point. It’s a surprising departure from the initial tapering of previous easing cycles from the central bank, and a break from consensus expectations from as recently as last week before markets began a major price drop. But stocks struggled to move forward following the decision, after the initial shock, as investors worried that the big cuts signaled greater economic weakness ahead, even with inflation on track to the central bank’s 2% target. .SPX 1D mountain S & P 500 Many market watchers were disappointed by the move, saying the Fed was too aggressive — and likely too backward — with its first cut. Ryan Sweet, chief U.S. economist at Oxford Economics, noted that the partial cut suggests that slower growth is increasingly affecting Fed policymakers. “The first phase of the Federal Reserve’s normalization cycle is more aggressive than expected as the central bank quickly shifted its focus from inflation to the labor market,” Sweet said in the letter. “Although the Fed won’t admit it publicly, its dual mandate is becoming one as the labor market softens.” “In our view, the increase in the unemployment rate shows insufficient employment [absorbs] strong gains in labor supply, primarily driven by immigration,” wrote Sweet. “The Fed is likely worried that labor demand will be too weak, causing stress points in the labor market.” ‘Jumped the gun’ Nancy Tengler, CEO and chief investment officer of funds at Laffer Tengler Investments, we said the central bank “jumped the gun” with its decision “Unemployment may rise but we see no layoffs – JOLTs are still very high, above pre-pandemic levels. ” Tengler said. “My criticism of the Fed has been a myopic focus on backward-looking data. This is what it sounds like. One weak employment report and here we are.” Elsewhere, Scott Helfstein, head of investment strategy at the exchange-traded fund company Global X, expects that the latest economic data does not support a large reduction by the Fed, although he expects that the reduction will support risk. assets. “There are none. There are many indications that the economy is slowing in the latest numbers,” said CNBC’s Jeff Cox and Michelle Fox who contributed to this report.