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MNI INTERVIEW: Fed Might Need Bigger Cuts If It Waits Too Long

MNI speaks with ex-Treasury Deputy Assistant Secretary for Macroeconomics in the Office of Economic Policy Tara Sinclair.

The U.S. economy could weaken more than expected if Federal Reserve officials wait too long to cut interest rates, potentially forcing policymakers to kickstart their easing cycle with a 50-basis-point rate cut, former senior Treasury official Tara Sinclair told MNI.

Sinclair is more concerned about an unexpected labor market weakening, particularly considering the gradual but substantial rise in the jobless rate over the past year to 4.1%, than about some kind of inflation resurgence.

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The U.S. economy could weaken more than expected if Federal Reserve officials wait too long to cut interest rates, potentially forcing policymakers to kickstart their easing cycle with a 50-basis-point rate cut, former senior Treasury official Tara Sinclair told MNI.

Sinclair is more concerned about an unexpected labor market weakening, particularly considering the gradual but substantial rise in the jobless rate over the past year to 4.1%, than about some kind of inflation resurgence.

Keep reading...Show less