Fed Member, Susan Collins signalled that the Fed will have to cut rates to support the weakening job market across the country. However, Collins believes that hiring will improve in the future. Here is the breakdown from her remarks.
Fed Collins
- Perhaps another 25 bps of easing might be appropriate.
- The job market risks suggest more easing is needed.
- Consumer sentiment measures aren’t particularly strong, and sentiment hasn’t been the best predictor of consumption.
- I expect hiring will improve over the longer horizon.
- I have long expected tariffs would take some time to work through the economy.
- Inflation continues to be top of the mind.
- Breakeven job growth rate could be around 40k a month.
- The downside risks to the labor market have likely risen.
- It is prudent to normalize rates a bit further in 2025.
- As uncertainty fades, would expect hiring to increase.
- We expect a relatively modest further rise in unemployment.
- Policy would remain restrictive even with more easing.
- Inflation risks have become more contained, but tariffs will still push up prices.
- Inflation should begin to ease as tariff impact wanes.
- Downside risks to job market have risen.
- Favourable financial conditions will support households.
- Expects more growth, small rise in unemployment, inflation elevated.
- Policy not on pre-set path, there are scenarios that would keep rates steady.
- Seems ‘prudent’ to cut rates further given lower inflation risks, job market concerns.
Looking at EURUSD pair we can see a ‘double-bottom’ pattern, which may signal that the bulls are in power to cross above the EMA200 (the red line) resistance zone.
Source: xStation5
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