Former U.S. Treasury Secretary Larry Summers said September's better-than-expected jobs report showed the Fed's half-point rate cut was a “mistake.”
Employers added 254,000 jobs in September, well above the 140,000 increase expected by economists at LSEG, and the unemployment rate fell slightly from a month earlier to 4.1%, the Labor Department said. In response to the report, Mr Summers took to social media to express his views on the central government. Bank actions.
“Today's jobs report confirms suspicions that we are in a high-neutral interest rate environment where responsible monetary policy requires caution in cutting rates,” the prominent economists wrote. “In hindsight, the 50 basis point rate cut in September was a mistake, but it didn't have major consequences.”
“Based on this data, not only 'no-landing' but also 'non-landing' are risks that the @FederalReserve must consider,” he continued. “Nominal wage growth remains well above pre-COVID levels and does not appear to be slowing.”
Analysts at Kobeisi Letter said the latest employment data was better than expected for the first time since May and questioned whether the central bank's 50 basis points cut was too aggressive.
According to the newspaper, ahead of the latest employment report, the market had seen a nearly 50% chance that interest rates would be cut by 50 basis points next month, but after the employment report, a 25 basis point rate cut was expected in November. The probability of being rejected has skyrocketed to 93%. .
Eric Bean, a labor lawyer and partner at Foundation Law Group, told FOX Business that the 50-point cut was a mistake in response to a slowing labor market and rising unemployment. He said he did not agree with that opinion. Submission.
“Now that inflation is under control, we want to address the other side of the Fed's mandate and make sure it doesn't depress jobs,” Bean said, adding, “I think there will probably be more rate cuts.” Ta. Preventing large employment declines in the future will require more measurement than half. ”
