Economy

Today's jobs report may have given Fed an excuse to hike rates

Today's jobs report may have given Fed an excuse to hike rates”

But he added, "I am not wedded to anything", and said he would take a wait-and-see approach.

New York Fed President William Dudley on Friday largely restated his confident take on the USA economy, arguing that the falling dollar and an unemployment rate that dipped last month to its lowest level since 2001 were reasons to keep tightening monetary policy.

The disappointing jobs report for September may have given the Federal Reserve the ammunition it needs to hike rates again this year.

The difficulty some US firms face in filling high-skilled jobs may be limiting business investment, a Federal Reserve policymaker said on Friday, adding that unequal opportunities in the labor market tends to sap economic vitality.

"The combination of a tight labor market and higher earnings increases the odds of additional Federal Reserve tightening and supports the argument for another Fed rate hike this year, likely at the December meeting", James Ragan, director of individual investor group research at D.A. Davidson, told CNBC.

"Even though inflation is now somewhat below our longer-run objective, I judge that it is still appropriate to continue to remove monetary policy accommodation gradually", he said in prepared remarks for a speech at a conference in Brooklyn.

As expected, the two hurricanes last month distorted the jobs report.

Kaplan says the labor market continues to make solid progress despite the one-off September drop, which should allow the central bank to continue raising interest rates slowly.

Bostic said his economic forecasts do not include any changes to fiscal policy, in line with many of his colleagues.

"We can afford to be patient", he said.

With unemployment in a range of 4.2 percent to 4.4 percent, "we're going to see robust growth, and we should see, start to see inflationary pressures", Bostic said, echoing the broad consensus on inflation among Fed policymakers, including Chair Janet Yellen.

"But we've had other episodes where cash windfalls have been used to buy back stocks and those sorts of things, in which case you are not getting to the same level of productive transmission of that policy".



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