The President of the Chicago Federal Reserve stated that the labor market remains robust and there may be "considerable" room for interest rate cuts

According to the Zhitong Finance APP, Chicago Federal Reserve Bank President Charles Evans stated on Thursday that the latest internal research shows that the U.S. labor market remains stable. In an interview, he pointed out, "This indicates that the labor market has a certain level of robustness, and I believe the overall economy still shows a fairly solid growth momentum."

However, there are still differences within the Federal Reserve regarding the extent of future interest rate cuts. Some officials are concerned that the labor market may weaken, while others are more focused on high inflation. According to the dot plot forecast released after last month's monetary policy meeting, the median indicates that there will be two more rate cuts in 2025. Evans emphasized that if inflation indeed falls towards the 2% target, there is "considerable" room for rate reductions.

Due to the government shutdown causing delays in the release of official economic data, Federal Reserve officials are seeking alternative data to assist in their judgments. Evans mentioned that analysis from the Chicago Fed indicates that the unemployment rate is likely to remain unchanged in September.

Meanwhile, U.S. mortgage rates have risen for the second consecutive week. According to Freddie Mac, the average rate for a 30-year fixed mortgage has increased to 6.34%, up from 6.3% last week. However, homebuyers seem to be responding to the significantly lower loan rates seen earlier in the year. Data from the National Association of Realtors shows that the number of signed contracts for existing homes reached a five-month high in August. Nevertheless, many buyers are choosing to wait due to concerns about borrowing costs, job prospects, and the direction of the economy.

Analysts believe that due to fluctuations in U.S. Treasury yields and the government shutdown, mortgage rates are expected to fluctuate within a narrow range in the short term. Jiayi Xu, a senior economist at Realtor.com, stated, "The timing of this government shutdown is particularly sensitive, coinciding with the Federal Reserve's first rate cut in 2025. Once key data such as employment and inflation are delayed, it will create uncertainty for the central bank's subsequent decisions." She added that the Federal Reserve operates independently, and the October meeting will not be directly affected, but if the shutdown drags on, its potential impact on the market and policy will gradually increase