Falled faces that grow growing split. Dealing of job market, inflation data test policy path

Copyright © HT Digital Streams Limit all rights reserved. Nicole Goodkind, Barrons 3 min Read 29 Sept 2025, 07:21 PM IST The US Federal Reserve’s next policy meeting is October 28-29. (Lying Photo: Reuters) Summary Recent speeches by Fed officials indicate a deepening separation over the future path of rate cuts. The weakened background of the US labor market drove the Fed to lower interest rates by a quarter percentage point on September 17, the first policy reduction of 2025. This is after employers added only 22,000 in August, while unemployment rate rose to 4.3%. “The increased disadvantage risks for employment have shifted the balance of risks to achieving our goals,” Fed chairman Jerome Powell said last Tuesday in a speech on the Greater Providence Chamber of Commerce. However, a week of speeches from Fed officials shows little consensus about what’s coming. Central bank projections in September and December asked for two more quarterly point cuts. However, the mixture of fragile work growth, stubbornly increased inflation, resilient consumer spending and still strong economic activities split policymakers about how fast to move. Governor Michelle Bowman warned on Thursday that the Fed risks were falling behind the curve. The labor market remains ‘fragile’, she told Georgetown University at a Psaros Center for Financial Markets and Policy Opportunities, adding that rates may have to fall faster in the coming months. The newly sweated Governor Stephen Miran went on and dissatisfied at the 16-17 September meeting of the Federal Open Market Committee in favor of a half-point cut. At Fox Business, he then argued for a series of aggressive half -point movements, saying that the longer borrowing costs are still being increased, “the greater the risk of the economy that you are getting really a significant increase in unemployment.” Other Fed officials are urging a more cautious approach, referring to sustained inflation. Atlanta president Raphael Bostic recently reminded the audience that inflation has not been as low as the Fed’s 2% target for 4½ years. It remains something “we should definitely be concerned,” he said. Indeed, head inflation rose 2.7% in August, and core inflation, except for food and energy prices, rose by 2.9%, based on the latest reading of the price index for personal consumption expenses, released on Friday. The PCE is the Fed’s favorite inflation measure. Jeff Schmid, president of Kansas City, said earlier this week that although the conditions of the labor market justify the latest interest rate cut, inflation remains too high and the policy is only slightly restrictive. “My view is that inflation remains too high, while the labor market, although refrigeration, remains largely in balance,” Schmid said in Dallas on Thursday. “I consider the current position of policy as just slightly restrictive, which I think is the right place to be.” Tom Barkin, president of Richmond Fed, reflected the confidence and pointed out that after years of limited appointment, businesses are less prone to the discharge. “That means the disadvantage in the job market should be limited,” he said at the Peterson Institute for International Economics on Thursday. Chicago president Austan Goolsbee warned against the overweight of poor payroll prints. He spoke during a breakfast event in Grand Rapids Michigan, saying that he was “somewhat uncomfortable with too many rate cuts based on the delayed payroll.” The Fed’s next policy meeting is October 28-29. By then, officials will have another inflation report and the work data in September, two signals that can sow more confusion, even while helping to determine whether policy makers are lowering the rates again. Write to Nicole Goodkind on [email protected]. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More topics #un -work rate #inflation #us federal reserve #united states #monetary policy #us monetary policy read next story