BlackRock: Rate-cut outlook hinges on whether the labor market remains soft enough

BlockBeats News, September 18: Jean Boivin, Managing Director of BlackRock Investment Institute, stated that the prospect of a Fed rate cut is likely to depend on whether the labor market remains sufficiently weak. He pointed out that Powell referred to the Fed's latest rate cut as "risk management" in response to signs of worsening weakness in the employment market, which may imply that future policy actions will heavily rely on data performance. Boivin believes that the Fed may face pressure in controlling inflation and debt-servicing costs—although these pressures are dissipating, if the rate cut boosts business confidence and hiring activities, inflation could easily reignite. In this context, further weakening of the labor market will provide more basis for the Fed to cut rates further. (FXStreet)