Posted 3/24/2024, 4:00:00 PM
Fed Prepared to Cut Rates if Job Market Falters, Despite Risk of Higher Inflation
- Fed ready to cut interest rates if job market unexpectedly weakens, even if it means higher inflation
- Powell signaling willingness to tolerate slightly higher inflation to support jobs
- Fed closely watching for signs of cracks in labor market like job cuts or reduced hours
- Some economists see warning signs like rising unemployment in several states
- Fed wants to avoid momentum in unemployment rate leading to layoffs and a recession
