A 25 bps cut is a better choice than 50 this week, says Roger Ferguson

Federal Reserve Policy - The market anticipates the Fed will cut rates this week, with debate centered on a 25 basis points cut versus a 50 basis points cut [1] - Data reinforcing labor market weakness and spillover into higher prices suggests a 25 basis points cut is more appropriate [2] - The Fed is expected to emphasize data dependence, making each meeting's decision independent [2][3] - There's a possibility of dissent within the FOMC regarding rate cuts, as inflation remains above the 2% target, around 28%-29% [16][17] - Structural factors in the labor force, such as immigration and the impact of AI, could influence the decision to cut rates [17][18] - The upcoming meeting will include the Summary of Economic Projections (SCP) and dot plots, revealing the committee's divisions based on incoming data [20] Inflation and Economic Data - Recent data showed a headline inflation number of 29% and core inflation around 3% annually [5] - Some consider the inflation data not "tame" enough for the Fed to definitively confirm movement towards the 2% target [6] Federal Open Market Committee (FOMC) Dynamics - Steven Myron's involvement raises questions about the Fed's independence [8] - The situation surrounding Lisa Cook's appointment and property disclosures adds uncertainty [8][9][10][11][12][13][14]