Trump "designated" Federal Reserve Governor Milan: The October non-farm payroll impact is "significantly dovish," and the November CPI may be announced only after the December interest rate decision
Federal Reserve Governor Michelle Bowman stated that the September non-farm payroll report indicates a cooling labor market, leaning towards a dovish stance. She revealed that if she had a decisive vote, she would support a 25 basis point rate cut. The November CPI data may be released after the December meeting, and policy discussions will be based on current trends. New York Fed President Williams also indicated that there is room for rate cuts, which the market interprets as an increased dovish signal within the Federal Reserve, raising expectations for a rate cut in December
Trump appointed Federal Reserve Governor Milan stated on Friday that the non-farm payroll report for September released overnight is "clearly dovish," reinforcing evidence of a continued cooling in the U.S. labor market.
He emphasized that the current data available to the Federal Reserve is indeed limited, "but a lack of data does not mean we do not have forecasts," and policy decisions can still be based on trend judgments. Milan further revealed his policy inclination, stating that if his vote is decisive in the next interest rate meeting, "I would vote to support a 25 basis point rate cut."
Milan pointed out that the release date of the November CPI data may fall after the December FOMC meeting, meaning that decision-makers will not have access to that data during the meeting, which also implies that policy discussions will be more based on current labor and inflation trends.
Earlier the same day, Federal Reserve Bank of New York President John Williams stated that as the labor market cools, the Federal Reserve still has room for further rate cuts in the near term to adjust its policy stance closer to neutral levels.
The remarks from Williams and Milan were interpreted by the market as another clearer dovish signal from within the Federal Reserve, adding momentum to expectations for a rate cut in December.
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