Fed policymakers see labor market as key to rate cut decision Reuters

JACKSON HOLE, Wyoming (Reuters) – Federal Reserve policymakers said on Thursday that, with inflation well below its highs, they were paying close attention to the U.S. labor market to gauge when to start cutting interest rates, one saying he should be moving “soon. ”

“I think it’s soon appropriate to start easing,” Boston Fed President Susan Collins said on Thursday, signaling her likely support for an interest rate cut at the US central bank’s policy meeting next month.

Collins, in an interview with Fox Business on the sidelines of the central bankers’ annual economic symposium in Jackson Hole, Wyoming, said inflation has eased “quite a bit.” The Fed is targeting 2% annual price index inflation for personal consumption expenditures; with this indicator, inflation was 2.5% in July.

With labor markets generally healthy and keeping that health a priority, Collins said, “I think a gradual, methodical pace (of interest rate cuts) once we’re in a different policy position is likely to be appropriate.” .

Her view contrasts with Kansas City Federal Reserve Bank President Jeff Schmid, one of the US central bank’s more demanding policymakers.

“We have a couple of data sets coming before September,” Schmid said in an interview with CNBC, referring to the Fed’s Sept. 17-18 policy meeting. “There’s room to think about where we go from here, but I honestly think we have time.”

Still, he added, it “bears a better look” at the recent increase in the unemployment rate, which measured 4.3 percent in July. . that you probably want to act before (inflation) gets to two (percent), but that sustainability at two I think is really important.”

The US central bank is expected to start cutting its key policy rate at its next meeting, with most Fed officials buoyed by encouraging inflation data and growing concerns about the health of the labor market.