The Fed's decision to cut interest rates by 50 basis points reflects its growing confidence in taming inflation and a renewed focus on supporting the job market.

The federal funds rate is a benchmark that influences other interest rates throughout the economy. The Federal Reserve doesn't control the federal funds rate directly. Instead, it uses various monetary policy tools to steer the benchmark toward a target range, which is currently 4.75% to 5%.

Sahm is the creator of the recession indicator, the "Sahm rule", which has until now accurately predicted every U.S. recession since 1970. The rule indicated a recession last month after data showed U.S. jobless rate reached 4.3% in July.