The Fed believes that multiple rate cuts are necessary to maintain the health of the labor market, according to the Chicago Fed President.

September 7, 2024, 2:43 AM GMT+9

On the 6th, Charles Evans, President of the Federal Reserve Bank of Chicago, stated that the Federal Reserve (FRB) needs to lower the policy interest rate to maintain the health of the labor market, and indicated that multiple rate cuts will be necessary.
In an interview with CNBC, Evans said, "The inflation rate is decreasing every month. We have been tightening monetary policy, but would we want to tighten monetary policy when the labor market is cooling this much?" He added, "Serious doubts are emerging not only for this (September) meeting, but also for the coming months. Preventing further deterioration of the situation is a major challenge for the FRB."

In addition, a rate cut is expected to occur multiple times, rather than just a one-time occurrence. Even looking at past cases, when the economy slowed down, multiple rate cuts were justified.