- Federal Reserve Vice Chair Philip Jefferson on Tuesday said the U.S. central bank's half-percentage-point interest-rate cut last month was aimed at keeping the labor market strong even as inflation continues to ease.
The Fed's 50-basis-point rate cut at its Sept 17-18 meeting was bigger than many analysts had expected. In remarks prepared for delivery to Davidson College in Davidson, North Carolina, Jefferson explained the reasoning behind the decision in much the same terms that Fed Chair Jerome Powell has done -- as a bid to keep the economy healthy, while still fighting inflation.
Inflation by the Fed's targeted measure, the year-over-year change in the personal consumption expenditures index, was 2.2% in August,"much closer" to the Fed's 2% goal than two years ago when it was 6.5%, Jefferson said.Meanwhile unemployment is at 4.1%, up only a"limited" amount from 3.8% a year ago, Jefferson said. Job growth has slowed, however."The cooling in the labor market is noticeable," he said.
"My approach to monetary policymaking is to make decisions meeting by meeting," Jefferson said."As the economy evolves, I will continue to update my thinking about policy to best promote maximum employment and price stability."Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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