"Federal Reserve Mouthpiece": The labor market may become the biggest clue for future rate cuts

BlockBeats News, January 29 — In his latest article, “Federal Reserve Mouthpiece” Nick Timiraos reports: The Federal Reserve maintained interest rates as expected and did not specify when it might resume rate cuts. In December’s forecast, 12 out of 19 officials expected at least one more rate cut this year.

The answer depends on which scenario occurs first: a collapse in the labor market or inflation confidently returning to the 2% target.

Since December, neither has happened. Job growth has slowed significantly, but the unemployment rate remains stable. Due to statistical disruptions caused by the government shutdown, inflation data has become ambiguous. If the labor market does not weaken further, the next rate cut may have to wait until after Fed Chair Powell’s term ends in May this year. (Jin10)