Federal Reserve Musallam: If labor market risks intensify, policy rates may need to be adjusted
2025-08-23 00:01:53
On August 23rd, the Federal Reserve said that it should look at the entire interest rate path, not just the interest rate decision at a certain meeting. Inflation is already above target and there are persistent risks. The next jobs report may be enough to justify the need for a rate cut, or it may not be enough, depending on the specific content of the report. Fed policy is moderately tightened. More data is needed and the outlook for the interest rate path will be adjusted until the September meeting. Job market risks are rising, but they are not yet apparent. The inflationary effect of tariffs is expected to fade gradually. The interest rate path may include a pause in interest rate cuts. If job market risks increase, the policy rate may need to be adjusted.
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