Fox Business Expert Warns Fed Rate Cut May Not Be Cure-All as Unemployment Rate Hits 4-Year High

The U.S. unemployment rate hit a four-year high in November according to Labor Department data shared on Tuesday, leading many economic pundits to predict Federal Reserve Chair Jerome Powell will cut rates again soon.

But Scott Shellady, a markets guru for RFD-TV and a frequent guest on Fox Business, said he does not believe that will necessarily chop the unemployment rate down. Why? Because artificial intelligence is taking a lot of jobs — and that trend is not going to slow down, he told Fox Business host Stuart Varney.

“For the first time ever, we are replacing people with machines — I think we are going to be replacing people with machines, or people with artificial intelligence,” Shellady said. “We’re not replacing people with different skills with people that have, say, old skills.”

He continued, “I’m not quite sure that the Fed cutting interest rates is even going to help the unemployment rate. I don’t think that’s going to be the case.”

“That’s fascinating,” replied Varney.

Shellady — who is known as “The Cow Guy” for his cattle-themed suits — shared his thoughts after the Labor Department reported the unemployment rate was 4.6%. The latest report, on a more optimistic note, showed 64,000 jobs were added in November — topping most projections of about 50,000 jobs.

The higher-than-expected unemployment rate is something that will not “sit well with the Fed or the mainstream media,” Shellady said a moment earlier.

Last week, the Fed announced its third interest rate cut of the year, cutting the federal funds rate by 25 basis points to a new range between 3.5% to 3.75%. Powell noted “inflation has eased significantly from its highs in mid-2022,” during the second year of President Joe Biden’s term, “but remains somewhat elevated relative to our 2% longer-run goal.”

He also blamed President Donald Trump’s tariffs for inflation increasing on a number of everyday goods.

“Total PCE prices rose 2.8% over the 12 months ending in September, and excluding the volatile food and energy categories, core PCE prices also rose 2.8%. These readings are higher than earlier in the year, as inflation for goods has picked up, reflecting effects of tariffs,” Powell said.

Watch above via Fox Business.

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