Fed Weighs Potential Rate Cuts Amid Rising Unemployment Concerns
Federal Reserve officials at the Jackson Hole conference are assessing a potential rate cut amid rising unemployment rates and increasing job seekers. Despite strong consumer spending, Fed members express concerns about the risks of maintaining tight monetary policy, with projections for an economic shift expected at the September meeting.
Federal Reserve officials at the annual central banking conference in Jackson Hole, Wyoming, are reassessing future monetary policy as the U.S. unemployment rate climbs from 3.7% in January 2023 to 4.3% in July 2024.
The rise in unemployment has coincided with an increase of 1.2 million job seekers, typically a positive economic sign. Fed officials, however, worry it might necessitate a rate cut, with Minneapolis Fed President Neel Kashkari and others hinting at adjustments during the upcoming Sept. 17-18 policy meeting.
Amid expectations of a quarter-point reduction, Fed Chair Jerome Powell is set to clarify the outlook at the Jackson Hole conference. The Fed aims for a 'soft landing' to curb inflation, now down to 2.5%, without sparking an unemployment crisis.
(With inputs from agencies.)
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