Fed Interest-Rate Cuts Pack Less of a Punch in Current Economy

Federal Reserve officials are poised to cut interest rates again next week, but any benefit to the economy is likely to take much longer to show up than normal and may be blunted by factors that monetary policy can’t control.

Rate-sensitive industries, like housing, could see a limited benefit from lower borrowing costs because home prices remain near record highs and Americans are worried about the labor market. Other sectors, like manufacturing, have held back investments due to President Donald Trump’s ever-changing tariffs, something lower rates would do little to help.

With those overhangs, the typical timeline for Fed policy ...