Why the December jobs report could delay interest rate cuts: Economist

December’s jobs report came in hotter than expected with the US adding 216,000 jobs, topping estimates of 175,000. While good news for some, this makes the Federal Reserve’s job a bit more difficult in terms of slowing the economy down to rein in inflation. Eugenio Alemán, Raymond James Chief Economist, joins Yahoo Finance to give insight into the jobs report data and how this will affect the Fed’s policy decisions going forward.
Aelmán explains : “The jobs market is still very strong. That creates issues for the Fed because it is always the case that the job market could potentially remain too strong for inflation going forward. For now, the signals from inflation is that the disinflationary process is ongoing and will continue, but in order to get to 2% target, the Fed needs to have inflation not to be higher than 0.15 for a sustained period of time. Almost a year with inflation below 0.15% per month and we haven’t been able to do that yet.”
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