There is an overwhelming Fed consensus for multiple rate cuts

Chicago Federal Reserve Bank (Fed) President Austan Goolsbee noted on Friday that Fed officials are finally starting to catch up with the broader market’s view that the time has come for a move by the US central bank on monetary policy rates, but downplayed the discussion of a broader. opening cut in September.

Key highlights

The labor market is slowing down.

Today’s employment data is a continuation of what we’ve seen.

It raises some serious questions about this meeting and the coming months, that we make sure we don’t make the labor market turn into something worse.

There is an overwhelming Fed consensus for multiple rate cuts.

When asked about higher rate cuts: Look at the dot charts, which didn’t show inflation falling as fast or unemployment rising as high.

When asked about a 50 bps cut in September: What happens at the next meeting is not the most important thing.

The current employment average is too low for the replacement rate.

We have a bit more tolerance for an upside surprise in the CPI, as the longer arc shows that inflation is falling.

I am concerned, if we maintain this level of restrictiveness, the chances of a recession could increase.