Today, the Fed talk is quiet, but former Cleveland Fed President Loretta Mester (she recently retired from the Fed) is on CNBC.
- Functional work will be an important part of the puzzle.
- There will be a discussion about whether they want to start with a 25 or 50 basis point cut.
- The Federal Reserve is likely to signal the path it will take to cut interest rates in the future.
- The labor market has been in a moderate to very tight state.
- Powell said in Jackson Hole that he doesn’t want the situation to get much weaker than it is now on employment.
- The Fed wants the labor market to be strong. A strong jobs report is certainly good news for the committee.
- Inflation has fallen and it’s time to start cutting monetary policy properly.
- The Fed looks at financial conditions, and part of that has to do with what’s happening in the stock market, but that’s just part of financial conditions.
- Politics doesn’t enter the room.
- Fed Focuses on Dual Mandates
- The Fed will be heavily criticized for what it does anyway. It needs to focus on its mandate.
It seems logical.
The US jobs report will be released on Friday with expectations that the NFP will rise to around 165K jobs and the unemployment rate will fall to 4.2% from 4.3%.
In pre-market trading
- Dow Industrial Average -222 points
- S&P -30
- Nasdaq -124 points
This article was written by Greg Michalowski on www.forexlive.com.