Summary:
1- Federal Reserve Chairman Powell stated that there is no rush to cut interest rates.
2- Kugler says the Federal Reserve should focus on job and inflation targets.
3- A decrease in initial weekly unemployment claims in the United States.
4- The Producer Price Index in the United States rose by 0.2% month-over-month.
Federal Reserve Chairman Powell stated that there is no rush to cut interest rates.
Federal Reserve Chairman Jerome Powell said at an event held by the bank on November 14 in Dallas that the bank is gradually shifting its policy toward a more neutral stance. He added that the path to achieving this goal is not predetermined and will depend on incoming data and economic forecasts. The labor market remains strong but is gradually cooling from the overheating conditions it experienced years ago, and it no longer represents a major source of inflationary pressures. Inflation is closer to the long-term target of 2%, but it has not yet been achieved. In a broadly balanced labor market with stable inflation expectations, inflation will continue to decline toward the 2% target. There are no signals from the U.S. economy indicating that the Federal Reserve needs to quickly cut interest rates. In fact, the current economic strength gives the Federal Reserve the ability to make cautious decisions, and it may be wise to slow the pace of interest rate cuts if the data allows.
Kugler says the Federal Reserve should focus on job and inflation targets.
Federal Reserve Governor Adriana Kugler stated on Thursday that policymakers must focus on job and inflation targets. Currently, the labor market is slowing, and progress toward the 2% inflation target has also slowed. Kugler mentioned that if any risks arise that could disrupt progress or accelerate inflation, it would be appropriate to halt interest rate cuts. However, if the labor market suddenly weakens, it would be appropriate to continue gradually cutting interest rates.
Weekly Initial Jobless Claims Decrease in the United States
The U.S. Department of Labor announced on Thursday that initial jobless claims for the week ending November 9 fell by about four thousand claims to 217,000, which is below market expectations of 223,000 claims. This decline indicates that the labor market in the United States remains stable, and the slowdown in job growth in October was merely an anomaly. The rise in jobless claims in early October was attributed to the impacts of hurricanes "Helen" and "Milton" and a strike by Boeing workers. However, layoffs are still at historically low levels, which supports the economy. Although many employment-related indicators point to a clear decline in the labor market this year, this has not yet affected unemployment insurance data.
U.S. Producer Price Index Rises by 0.2% Month-over-Month
The U.S. Department of Labor reported on November 14 that the Producer Price Index (PPI) rose by 0.2% month-over-month and by 2.4% year-over-year, in line with market expectations. While the U.S. PPI remains above the long-term inflation target set by the Federal Reserve at 2%, the trend indicates a slowdown in price increases. It is unlikely to have a significant impact on the Federal Reserve's actions in its final monetary policy meeting of the year. According to data from the CME Group, market bets on a 25 basis point rate cut in December have slightly decreased to 75.4%, but there is still a significant chance of a rate cut.
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