Key facts
- Federal Reserve policymakers are leaning against an October rate hike.
- The September jobs report showed a 29,000 hiring gain and a rise in the unemployment rate to 4.2%.
- The Fed last hiked its interest rate target to between 3.75% and 4%.
Federal Reserve policymakers are signaling a potential pause in interest rate hikes for their upcoming October meeting. This cautious stance is supported by recent economic indicators, including a less robust jobs report and moderating wage growth. Officials are indicating a desire to observe further data, particularly on inflation, before committing to any additional monetary tightening. While an October skip appears likely, the possibility of a rate hike in December remains on the table, contingent on evolving economic conditions.
Cleveland Fed President Beth Hammack stated that the September jobs report, which showed a 29,000 hiring gain and a rise in the unemployment rate to 4.2%, aligns with the recent trend of hiring. She noted that on average over the past 12 months, 41,000 new jobs have been created monthly, which is largely in line with her estimate for stability in the hiring sector. Hammack added that there is still ample time and information to consider before the Fed's meeting at the end of the month to determine the appropriate monetary policy stance. The Fed last raised its interest rate target by a quarter percentage point to between 3.75% and 4%, and officials had previously penciled in expectations of another increase before year-end.