The economy is showing sufficient signs of cooling, and the Federal Reserve is taking several risks if it continues to hold off on dialing back policy.
In "Rocky II," just as Adrian – the titular character's love interest – tells the boxer to win by beating Apollo Creed in a rematch, Rocky's manager Mickey yells, "What are we waiting for?" That line could be directed at the Federal Reserve after Friday morning's jobs report . The unemployment rate climbed to 4.1% in June, and wage inflation is moderating, with average hourly earnings up 0.3% last month.
If the Federal Reserve waits until inflation reaches its 2% target before dialing back rates, it will have inadvertently tightened interest rate policy just as the economy is slowing down. That overshoot could also lead to an unnecessary recession. Also, if the Fed dials back policy later – rather than sooner – there will be claims of political interference if it cut rates immediately before the presidential election. This is a move it is typically unwilling to make.
Markets Breaking News: Economy Economy Breaking News: Markets Business News
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Ron Washington Reveals Why Angels' Hottest Hitters Aren't Moving Up in LineupLos Angeles Angels manager Ron Washington adopts an unconventional approach to finding a cleanup hitter.
Read more »
Angels' Ron Washington Opens Up About Why He Took Halos JobDespite having a comfortable role coaching with the Atlanta Braves — a team with World Series aspirations — Ron Washington couldn't resist a rare chance to manage in the big leagues again.
Read more »
Here's why these analysts do not expect the Fed to cut rates in 2024Here's why these analysts do not expect the Fed to cut rates in 2024
Read more »
Fed's Kashkari: It’s reasonable to predict Fed won’t cut rates until DecemberMinneapolis Federal Reserve President Neel Kashkari said on Sunday that it is a “reasonable prediction” that the Fed will wait until December to cut interest rates, adding that the central bank is in a very good position to get more data before making any decisions.
Read more »
Fed's Collins: Fed has made significant progress, but inflation remains stubbornFederal Reserve (Fed) Bank of Boston President Susan Collins noted on Tuesday that despite significant progress made on inflation by the Fed and its policies, there's still plenty of work to be done.
Read more »
Why Cowboys coach Mike McCarthy is 'getting fed up' with Jerry JonesMcCarthy is entering the 2024 season on the final year of his contract.
Read more »