BlackRock: The Prospect of Fed Rate Cuts May Depend on Continued Weakness in the Labor Market

Jinse Finance reported that Jean Boivin, Head of the BlackRock Investment Institute, stated that the prospect of Federal Reserve rate cuts will likely depend on whether the labor market remains sufficiently weak. He pointed out that Powell said the Fed's latest rate cut was a matter of "risk management" in response to increasing signs of labor market weakness, which could mean that future policy actions will be highly data-dependent. Boivin believes the Fed may face pressure in controlling inflation and debt servicing costs—although these pressures are easing, if rate cuts boost corporate confidence and hiring, inflation could easily reignite. Against this backdrop, further weakening of the labor market would provide more grounds for the Fed to cut rates. (Golden Ten Data)