Fed’s ‘dot plot’ signals it won’t be in a rush for another 50bps cut, but jobs data dominates. By Investing.com

Investing.com — The Federal Reserve’s excessive interest rate cut in September is not a sign of things to come, as the latest signals from the Fed’s “dot plot” show that members are in no rush to support another rate cut 50 bps unless there is an unexpected burst in the job market.

“Based on what we know now, we believe the FOMC is likely leaning toward tapering at a pace of 25 bps going forward,” Wells Fargo economists said in a recent note, signaling the company’s updated summary of economic forecasts Fed, or the so-called dot plot. .

The Fed offered a 50-basis-point rate cut on Sept. 18 and signaled it could cut two more 25-basis-point cuts this year and a one-percentage-point cut next year.

Fed Governor Michelle Bowman was the lone dissenter against a bigger cut, favoring a smaller 25 bps cut at the September meeting, but the chart showed that “a significant portion of the Committee is in no rush to make 50 bps cuts the default move “, the economists added.

The big Fed rate cut was an effort to speed up initial policy easing, Wells Fargo suggests, because most FOMC members “didn’t want to see any further weakness in the labor market.”

But hopes for another jumbo 50bps cut could be revived if the labor market signals an unexpected weakening.

The next two employment reports, scheduled for October 4 and November 1, will be key to the outlook for monetary policy.

“An unexpected slowdown in wage growth or a larger-than-anticipated increase in the unemployment rate could prompt us to project another 50bps move at the November 7 FOMC meeting,” Wells Fargo said.