BlockBeats News, October 15th, Federal Reserve’s Collins called for further interest rate cuts this year, citing growing concerns about the weakening labor market. Collins said, “With inflation risks somewhat under control, but concerns about the labor market weakening increasing, it seems prudent this year to further moderately normalize policy to support the labor market.” She added that even with further interest rate cuts, monetary policy would remain moderately tight, “which is appropriate to ensure that inflation can resume its downward trend after the gradual transmission of tariff effects to the economy.” Collins emphasized that both short-term and long-term inflation indicators are currently relatively stable.
She stated that the bigger concern is the labor market: “The labor market has cooled to a peculiar state of balance—where neither hiring nor layoffs are high, and the unemployment rate remains low. However, if it further weakens, it will generate unwelcome softness that would make the economy more vulnerable to adverse shocks and could trigger even more unfavorable dynamics.” She also suggested that perhaps another 25 basis point rate cut would be appropriate. (FXStreet)
