The prospect of the Fed's interest rate cut is closely related to labor market conditions

Jean Boivin, director of BlackRock Investment Research Institute, said the possibility of the Fed's future interest rate cut is closely related to the labor market conditions. He stressed that Fed Chairman Jerome Powell's recent rate cut is a response to signs of weak labor markets, indicating that future policy decisions will rely heavily on data. The blog post pointed out that although pressures on inflation and debt service costs are easing, the Fed may still face challenges in these areas. He warned that inflation could easily rise again if interest rate cuts boost corporate confidence and employment. Against this backdrop, further weakness in the labor market may provide more reasons for the Federal Reserve to cut further interest rates.