Fed chief: ‘It’s time’ to cut interest rates as signs of labor market slowdown

Rachel Siegel:

Although they have left many options open, there are actually some viable paths here.

If central bankers are really worried and see increasing data suggesting that labor market growth is not only slowing but perhaps even collapsing under the weight of higher interest rates combined with rising unemployment or mass layoffs, they could decide to cut interest rates by half a percentage point in September.

And that would not only be a larger scale, but also a sign of deeper concern and the need to take that concern seriously and act quickly.

Or they could stick with a more typical quarter point, signaling a somewhat calmer, gradual approach, and perhaps plan for similar quarter point cuts for the rest of the year.

Some politicians also say that it is not really the exact extent of the cuts at one meeting or another that matters, but much more that we remember a path, that we have a plan and that we are really determined to see it through.