By Ann Saphir

(Reuters) – Federal Reserve policymakers express growing confidence that inflation is cooling enough to justify interest-rate cuts, guided by economic data rather than stock market fluctuations.

Three U.S. central bankers shared their perspectives on the economy after deciding to maintain the policy rate, hinting at possible reductions in the coming month. A rise in the July U.S. unemployment rate triggered concerns about a recession, leading to global stock market turmoil.

Richmond Fed President Thomas Barkin emphasized that inflation appears to be settling down and indicated a positive outlook based on discussions with business leaders, who noted that slower hiring rather than increased layoffs is influencing the labor market.

Kansas City Fed President Jeff Schmid acknowledged the recent market volatility but remained focused on the Fed’s dual mandate of full employment and price stability. He expressed confidence in reaching the inflation target of 2% based on recent data.

Schmid characterized the economy as resilient and consumer demand strong, while acknowledging a cooling labor market. He mentioned the need for a measured approach to adjusting the policy rate.

Similarly, Chicago Fed President Austan Goolsbee reiterated that current policy is tight and warned against maintaining high borrowing costs as inflation decreases, which could negatively affect the labor market.

Goolsbee affirmed that the Fed would not be swayed by stock market performance or political events, stating, “The Fed’s out of the election business. The Fed is in the economic business. We’re not in the business of responding to the stock market. We’re in the business of maximizing employment and stabilizing prices.”