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MNI: Job Boom Means Slower Fed Cuts, Pause Possible - Ex-Staff

MNI speaks with ex-Fed staffers about how the September jobs report changes the policy path.

A strong rebound in U.S. employment suggests the Federal Reserve can cut interest rates more gradually after an aggressive start to the easing cycle and could even lead to a pause in rate reductions if it proves persistent, former Fed staffers told MNI.

Labor Department data Friday showed a 254,000 jump in U.S. payrolls gains in September and a drop in the jobless rate to 4.1%, surprising investors and boosting the benchmark 10-year Treasury yield to above 4%. Fed officials said in September they plan to lower interest rates faster in part because they expect unemployment to rise steadily to 4.4% by year-end.

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A strong rebound in U.S. employment suggests the Federal Reserve can cut interest rates more gradually after an aggressive start to the easing cycle and could even lead to a pause in rate reductions if it proves persistent, former Fed staffers told MNI.

Labor Department data Friday showed a 254,000 jump in U.S. payrolls gains in September and a drop in the jobless rate to 4.1%, surprising investors and boosting the benchmark 10-year Treasury yield to above 4%. Fed officials said in September they plan to lower interest rates faster in part because they expect unemployment to rise steadily to 4.4% by year-end.

Keep reading...Show less