Powell Shares Fed’s Labor Market Insights Following Third Straight Rate Cut
OLeary Ventures Chairman Kevin OLeary joins Mornings with Maria to discuss why more rate cuts are unlikely, the growing divide within the Federal Reserve, and the global fallout if political influence threatens Fed independence.
Federal Reserve Chair Jerome Powell recently addressed the state of the labor market following the Fed’s decision to cut interest rates for the third consecutive time. This comes as a fresh jobs report is set to be released on Tuesday.
During a press conference, Powell explained that the Federal Reserve policymakers voted to lower the benchmark federal funds rate by 25 basis points, bringing it to a range of 3.5% to 3.75%. This decision was influenced by signs of a weakening labor market and emerging risks related to the Fed’s dual mandate of promoting maximum employment.
According to Powell, the latest jobs report from the Bureau of Labor Statistics (BLS) indicated that the unemployment rate has “continued to edge up,” reaching 4.4%, with job gains significantly slowing earlier in the year. He noted, “A good part of the slowing likely reflects a decline in the growth of the labor force due to lower immigration and labor force participation, though labor demand has clearly softened as well. In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen in recent months.”
FED DELIVERS THIRD STRAIGHT RATE CUT BUT ‘DOT PLOT’ PROJECTS JUST ONE CUT IN 2026
Federal Reserve Chair Jerome Powell said there aren’t signs of a sharp downturn in the labor market. (Jim Watson/AFP/Getty Images)
The Fed’s recent decision was accompanied by a summary of economic projections, commonly referred to as the “dot plot.” This projection indicates that the unemployment rate is expected to rise to 4.5% by the end of 2025, before slightly decreasing to 4.4% next year.
Powell reassured that the Fed does not foresee a sharp downturn in the labor market. He emphasized that the current interest rate policy is nearing neutral, which should help stabilize the labor market and prevent a more significant decline. “The idea is that, now with having cut 75 basis points more now, and having policy in a broad range of plausible estimates of neutral, that will be a place which will enable the labor market to stabilize or to only tick up 1 or 2 more tenths,” he stated.
POWELL SAYS RATE CUTS WON’T MAKE ‘MUCH OF A DIFFERENCE’ FOR STRUGGLING HOUSING SECTOR
Powell also pointed out that payroll growth has slowed to an average of about 40,000 jobs per month since April. He mentioned that policymakers believe there has been an overstatement of approximately 60,000 in those monthly job figures, suggesting that the actual average might be around -20,000 over that period. “It’s very difficult to estimate job growth in real time,” he explained, noting that corrections are made twice a year.
Two policymakers dissented from the Fed’s decision to cut rates, advocating for keeping interest rates unchanged due to economic uncertainties, including inflation outlooks.
TRUMP SAYS WARSH, HASSETT ARE LEADING CONTENDERS FOR FED CHAIR PICK
Chicago Fed President Austan Goolsbee said that without signs of the labor market deteriorating, further rate cuts didn’t seem prudent with inflation elevated. (Brendan McDermid/Reuters)
Chicago Fed President Austan Goolsbee expressed that he believed a more cautious approach would have been to wait for additional data. “If the labor market were deteriorating rapidly, it would be a different calculation,” he stated. “But most of the data we have show stable economic growth with a labor market only moderately cooling.”
Kansas City Fed President Jeffrey Schmid also dissented, arguing that “inflation remains too high, the economy shows continued momentum, and the labor market – though cooling – remains largely in balance.”
The BLS is set to release the November jobs report on Tuesday, with LSEG economists predicting an addition of 40,000 jobs for the month.
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It is important to note that the BLS will not release a jobs report for October due to data collection issues caused by the government shutdown. Some October data will be included in the November report.
OLeary Ventures Chairman Kevin OLeary joins Mornings with Maria to discuss why more rate cuts are unlikely, the growing divide within the Federal Reserve, and the global fallout if political influence threatens Fed independence.
Federal Reserve Chair Jerome Powell recently addressed the state of the labor market following the Fed’s decision to cut interest rates for the third consecutive time. This comes as a fresh jobs report is set to be released on Tuesday.
During a press conference, Powell explained that the Federal Reserve policymakers voted to lower the benchmark federal funds rate by 25 basis points, bringing it to a range of 3.5% to 3.75%. This decision was influenced by signs of a weakening labor market and emerging risks related to the Fed’s dual mandate of promoting maximum employment.
According to Powell, the latest jobs report from the Bureau of Labor Statistics (BLS) indicated that the unemployment rate has “continued to edge up,” reaching 4.4%, with job gains significantly slowing earlier in the year. He noted, “A good part of the slowing likely reflects a decline in the growth of the labor force due to lower immigration and labor force participation, though labor demand has clearly softened as well. In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen in recent months.”
FED DELIVERS THIRD STRAIGHT RATE CUT BUT ‘DOT PLOT’ PROJECTS JUST ONE CUT IN 2026
Federal Reserve Chair Jerome Powell said there aren’t signs of a sharp downturn in the labor market. (Jim Watson/AFP/Getty Images)
The Fed’s recent decision was accompanied by a summary of economic projections, commonly referred to as the “dot plot.” This projection indicates that the unemployment rate is expected to rise to 4.5% by the end of 2025, before slightly decreasing to 4.4% next year.
Powell reassured that the Fed does not foresee a sharp downturn in the labor market. He emphasized that the current interest rate policy is nearing neutral, which should help stabilize the labor market and prevent a more significant decline. “The idea is that, now with having cut 75 basis points more now, and having policy in a broad range of plausible estimates of neutral, that will be a place which will enable the labor market to stabilize or to only tick up 1 or 2 more tenths,” he stated.
POWELL SAYS RATE CUTS WON’T MAKE ‘MUCH OF A DIFFERENCE’ FOR STRUGGLING HOUSING SECTOR
Powell also pointed out that payroll growth has slowed to an average of about 40,000 jobs per month since April. He mentioned that policymakers believe there has been an overstatement of approximately 60,000 in those monthly job figures, suggesting that the actual average might be around -20,000 over that period. “It’s very difficult to estimate job growth in real time,” he explained, noting that corrections are made twice a year.
Two policymakers dissented from the Fed’s decision to cut rates, advocating for keeping interest rates unchanged due to economic uncertainties, including inflation outlooks.
TRUMP SAYS WARSH, HASSETT ARE LEADING CONTENDERS FOR FED CHAIR PICK
Chicago Fed President Austan Goolsbee said that without signs of the labor market deteriorating, further rate cuts didn’t seem prudent with inflation elevated. (Brendan McDermid/Reuters)
Chicago Fed President Austan Goolsbee expressed that he believed a more cautious approach would have been to wait for additional data. “If the labor market were deteriorating rapidly, it would be a different calculation,” he stated. “But most of the data we have show stable economic growth with a labor market only moderately cooling.”
Kansas City Fed President Jeffrey Schmid also dissented, arguing that “inflation remains too high, the economy shows continued momentum, and the labor market – though cooling – remains largely in balance.”
The BLS is set to release the November jobs report on Tuesday, with LSEG economists predicting an addition of 40,000 jobs for the month.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
It is important to note that the BLS will not release a jobs report for October due to data collection issues caused by the government shutdown. Some October data will be included in the November report.
