Posted on 08/11/2025 9:40:06 AM PDT by SeekAndFind
NEW YORK (AP) — A top official at the Federal Reserve said Saturday that this month’s stunning, weaker-than-expected report on the U.S. job market is strengthening her belief that interest rates should be lower.
Michelle Bowman was one of two Fed officials who voted a week and a half ago in favor of cutting interest rates. Such a move could help boost the economy by making it cheaper for people to borrow money to buy a house or a car, but it could also threaten to push inflation higher.
Bowman and a fellow dissenter lost out after nine other Fed officials voted to keep interest rates steady, as the Fed has been doing all year. The Fed’s chair, Jerome Powell, has been adamant that he wants to wait for more data about how President Donald Trump’s tariffs are affecting inflation before the Fed makes its next move.
At a speech during a bankers’ conference in Colorado on Saturday, Bowman said that “the latest labor market data reinforce my view” that the Fed should cut interest rates three times this year. The Fed has only three meetings left on the schedule in 2025.
The jobs report that arrived last week, only a couple of days after the Fed voted on interest rates, showed that employers hired far fewer workers last month than economists expected. It also said that hiring in prior months was much lower than initially thought.
On inflation, meanwhile, Bowman said she is getting more confident that Trump’s tariffs “will not present a persistent shock to inflation” and sees it moving closer to the Fed’s 2% target. Inflation has come down substantially since hitting a peak above 9% after the pandemic, but it has been stubbornly remaining above 2%.
(Excerpt) Read more at apnews.com ...
A fear is that Trump’s tariffs could box in the Federal Reserve by sticking the economy in a worst-case scenario called “stagflation,” where the economy stagnates but inflation is high. The Fed has no good tool to fix that, and it would likely have to prioritize either the job market or inflation before helping the other.
Fed Vice Chair Michelle Bowman isn’t messing around. She’s calling for three rate cuts this year, saying the latest weak jobs numbers prove the labor market is wobbling more than the Fed admits. She was one of the few to vote against holding rates last month, arguing the Fed should have cut sooner to dodge a bigger mess down the line.
Unemployment ticking up to 4.2% and a slump to just 35,000 monthly job gains? To Bowman, that’s a flashing red light. She’s also shrugging off the tariff scare on inflation, crediting Trump’s tax cuts and deregulation for keeping things in check. With housing demand in the dumps and inflation finally playing nice, she’s betting slow and steady cuts now beat a messy scramble later.
Tariffs help the USA, not hurt it. That is why every country we trade with has them.
Your TDS is showing again.
It's unlikely that an interest rate cut will do anything to improve private sector employment here, and putting more people on public sector employment rolls requires an increase in public spending/debt increase.
The feds job is the isure there is limited inflation and money supply is stable. Of course i would prefer mixed commodities instead of a fed but. The job is not to regulate employment.
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