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   From: yourdime@outlook.com   
      
   Wall Street celebrated the Federal Reserve’s half-point rate cut last   
   month by sending stocks to fresh record highs, but the blockbuster jobs   
   report on Friday has caused doubts to creep in.   
      
   Analysts at Bank of America and JPMorgan, which was one of the few   
   banks that correctly predicted the half-point cut last month, have   
   lowered their expectations for November’s policy meeting, and now see a   
   quarter-point cut instead of another 50 basis points.   
      
   But others on Wall Street have warned that the situation calls for even   
   more caution from the central bank as further easing could reaccelerate   
   a still-robust economy, threatening to push inflation up again.   
      
   For instance, veteran market prognosticator Ed Yardeni told Bloomberg   
   Friday that the earlier half-point cut was unnecessary and no more cuts   
   are needed, adding that “I assume several Fed officials regret doing so   
   much.”   
      
   Ian Lyngen, the head of U.S. rates strategy at BMO Capital Markets,   
   said while he still expects a quarter-point cut next month, he warned   
   that if the next jobs report and inflation data come in too hot, then   
   the Fed will likely hold off on more easing.   
      
   “If anything, the employment update suggests that the Fed might be   
   revisiting the prudence of cutting in November at all—although a pause   
   is not our base case,” he wrote in a note.   
      
   Lawrence Lindsey, a former Fed official who also served as director of   
   the National Economic Council during the George W. Bush administration,   
   told CNBC Friday that policymakers need to consider how their rate cut   
   was followed by a jump in the 10-year Treasury yield, saying it may be   
   a sign they are doing something wrong.   
      
   “So my suspicion is that they’re probably going to have to pass at the   
   next meeting,” he added.   
      
   Further rate cuts, he warned, would validate expectations for sticky   
   inflation that are underpinning demands for big wage hikes from workers   
   at Boeing and East Coast ports.   
      
   Indeed, top economist Mohamed El-Erian said “inflation is not dead” and   
   that the Fed must maintain vigilance on price stability and the job   
   market rather than focus exclusively on supporting full employment.   
      
   Similarly, former Treasury Secretary Larry Summers posted on X that   
   nominal wage growth, a key driver for inflation, doesn’t appear to be   
   decelerating and that the jobs report shows any additional rate cuts   
   require a cautious approach.   
      
   “With the benefit of hindsight, the 50 basis point cut in September was   
   a mistake, though not one of great consequence,” he wrote. “With this   
   data, ‘no landing’ as well as ‘hard landing’ is a risk the   
   @federalreserve has to reckon with.”   
      
   Apollo chief economist Torsten Sløk, who has been steadfast in his view   
   that rates will stay higher for longer, said in a note on Saturday that   
   there’s no need for more Fed cuts, citing the strong economy, low rates   
   that consumer locked in earlier, fiscal spending, and AI-related   
   business investment.   
      
   Even before the jobs report, other data suggested the Fed’s rate cut   
   last month was already having a significant impact.   
      
   For example, the Institute for Supply Management’s services activity   
   index for September came in stronger than expected.   
      
   “Businesses are already starting to see activity and orders rebound as   
   the Fed takes their foot off of the brake,” Comerica chief economist   
   Bill Adams said in a note on Thursday.   
      
   https://fortune.com/2024/10/05/fed-rate-cuts-outlook-pause-november-   
   fomc-meeting-jobs-report-economy-inflation/   
      
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