Fed's Hammack on Jobs Report, Rate Decision and Powell

Labor Market Analysis - The labor market shows signs that should be watched carefully, with headline numbers coming down [2] - Unemployment remains within the 41% to 43% range for the past year, indicating a healthy labor market that is still well in balance [2] - The labor market is largely in balance, but dynamism is lacking, making it harder to find a job if one doesn't have one [4][5] - Businesses fought hard to assemble and train their labor force and are reluctant to let them go, but this may not last if demand decreases [10] - Potential weakening on the labor side is anticipated, which might warrant a response, balanced against inflation concerns [11][12] Inflation and Tariffs - Inflation is a bigger and longer-lasting problem, with the Fed missing its target for four and a half years [5] - People are feeling the pain of inflation, making difficult choices and finding their $400 emergency fund doesn't stretch as far [6] - The US is missing more on the inflation side than on the employment side [7] - Expectation is that inflation numbers will tick up, with $30 billion a month in tariff revenues being paid by someone [13] - Importers have borne a lot of the tariff costs to date, but they can't absorb those costs anymore and will start pushing that out into prices to consumers [14] - Inflation is expected to continue to tick up into the end of this year [15] Monetary Policy and Economic Outlook - Uncertainty has been high for businesses, making it difficult to make investments and execute plans [9] - The economy is operating right around a neutral long-term rate, and the current stance is modestly restrictive [16] - September is a realistic possibility for a rate move, but one month's data is not determinative [17][18] - It's a tricky time for monetary policymakers, as both sides of the dual mandate (maximum employment and stable prices) could potentially be in conflict [20][21] - Companies have been delaying, postponing, or scaling back investment plans [23] Fed Credibility and Independence - The speaker has enormous respect for Chair Powell, who acts with integrity and aims to do what's best for the American people [26][27] - Independent central banks lead to better economic outcomes [31]