Roger Ferguson on August jobs report: A September rate cut 'may be appropriate'

Federal Reserve Policy & Interest Rate - A rate cut in September may be appropriate, but the Fed remains data dependent [3] - The market is pricing in two more rate cuts after September, which may not be accurate [4] - Commentary from Fed officials since Jackson Hole has been cautionary regarding the pace of rate cuts [5] - Inflation numbers are not necessarily giving comfort to the need for a campaign of cutting rates just yet [5] Job Market Analysis - The job market is cooling, but not cold, with the unemployment rate at 43%, which is not alarming [2] - The jobs report was roughly as expected [2] Market Reaction & Financial Conditions - Markets want validation of their expectation that the Fed will start to be more accommodative [7] - Markets may be building in expectations a little ahead of themselves [7] - Financial conditions are pretty accommodative, suggesting a mixed picture [7][8] - Markets are looking for the news they want to hear, as opposed to a more balanced picture [8] - The Russell 2000 is up over 1%, with equities moving higher on potentially bad news [6] Credibility of Economic Data - The numbers have always been credible [9][11] - Large revisions were due to the federal government's slow reporting, especially during downturns [10] Fed Independence Concerns - The Fed's independence is questioned with the nomination of Steven Moran, who would keep a job in the administration [11][12] - The market should be paying attention to moves against the independence of the Fed [13] - The market has shrugged at this in terms of equities and the bond market [14]