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>>The Federal Reserve’s Jerome Powell advised against quick interest rate reductions due to potential trade barriers.

The Federal Reserve’s Jerome Powell advised against quick interest rate reductions due to potential trade barriers.

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1 day ago

Interest Rate Caution

Federal Reserve Governor Michael Barr advocates for a cautious approach to potential interest rate reductions, citing increased uncertainties and the need for more data. He urges Fed officials to carefully consider risks before making policy changes, emphasizing the challenges faced by lawmakers regarding employment and inflation. Barr stressed the importance of thorough analysis and updated predictions before any further rate adjustments.

Tariff Impacts on Inflation

Barr expressed concern that tariffs, particularly those initiated by former President Trump, could lead to persistent inflation. He noted that while initial impacts appeared minimal, future price increases are possible as businesses adjust to maintain profit margins. Sustained tariff-driven price hikes could influence consumer and business expectations, leading to a cycle of ongoing inflation.

Job Market Concerns

Barr addressed the recent decrease in job creation, noting difficulty in isolating the causes. Although labor supply and demand currently appear balanced, this equilibrium stems from a significant drop in both job seekers and new hires. This situation highlights potential vulnerabilities in the job market should adverse conditions arise.

Upcoming Fed Meeting and Personnel News

The Federal Reserve is scheduled to meet October 28-29 to consider further interest rate actions. Barr suggested a decision on rate adjustments may be made then, acknowledging the delicate balance between stimulating the job market and avoiding inflation. Former Fed Governor Larry Lindsey has withdrawn his name from consideration for the Fed chair position, citing a desire for personal well-being.