U.S. Federal Reserve Likely to Support Interest Rate Cuts

By Ann Saphir and Michael S. Derby
JACKSON HOLE, Wyoming (Reuters) -Federal Reserve policymakers on Thursday lined up in support of U.S. interest-rate cuts starting next month. With inflation down from its highs and a cooling labor market, officials are looking toward easing, though some caution against rushing the process.

Key Voices
– Patrick Harker, Philadelphia Fed Bank President: “Barring any surprises in the data before then, I think we need to start this process” of lowering rates, advocating for a slow and methodical approach.

• Susan Collins, Boston Fed President: Echoes Harker’s sentiment, stating that “soon it is appropriate to begin easing.” She acknowledges that inflation has eased significantly and emphasizes the importance of a gradual pace for rate cuts.

Diverging Views
– Jeff Schmid, Kansas City Fed Bank President: A more hawkish viewpoint, he emphasizes the need to analyze upcoming data before making decisions. He mentions that the recent rise in unemployment warrants careful consideration and suggests moving before inflation drops to 2%.

The Fed is anticipated to reduce its benchmark policy rate at the next meeting, as officials express optimism over inflation data while being increasingly concerned about job market health. The target is 2% annual inflation; the latest reading stands at 2.5% in July.