Federal Reserve

When it comes to the Fed policy today, the question of whether or not these rules are good at telling us if we’re currently in a recession is almost besides the point.

Bostic and Musalem, two members on the hawkish side of the Committee, joined the rest of the Committee in signalling an openness to rate cuts in September.

The Committee continues to react to the July jobs numbers.

Just a couple of reactions to the jobs data last week from Barkin and Goolsbee, both downplaying the jobs report.

A 50 basis point cut should be the base case after today and further slowdowns in the remaining jobs and inflation reports between now and the September meeting may bolster the case for more drastic action this year.

By delaying rate cuts in search of certainty, the Fed risks being behind the ball. The FOMC should actively keep the option of a 50 basis point cut on the table between now and the September meeting.

While Fedspeak has certainly shifted during the past few weeks, few members are itching to cut rates at the July meeting.

Fire prevention—rather than fire fighting—is a better approach to risk management when it comes to the labor market. When it comes to unemployment risk, the Fed should be proactive and preemptive, not reactive.

Another week of Fedspeak hearing from the dovish side of the Committee, who are mostly pushing back on July.