Federal Reserve Governor: Still Expects Two More Rate Cuts by End of This Year, Actively Seeking Feedback on Stablecoin Regulatory Requirements

On October 15th, according to Bloomberg, the payment giant Stripe has incorporated the stablecoin subscription payment feature.

On October 15th, as per the report in the Financial Times, Federal Reserve Chairman Powell gave a warning on Tuesday. He stated that the US labor market is presenting more indications of distress, hinting that he might be prepared to back another rate cut later this month. Powell pointed out, "The downside risks to employment have grown." This is the most emphatic indication thus far that Fed officials believe they have sufficient evidence to support another 25-basis-point cut in the US borrowing cost. Powell further added that even without the new data from the Labor Department (which was postponed due to the government shutdown), privately generated labor market indicators and internal Fed research offer adequate grounds to believe that the job market is cooling off. "The existing evidence" indicates that "layoffs and hiring remain at low levels," while "households' perspectives on job opportunities and businesses' views on recruitment difficulties continue to decline." Thes

On October 15th, Steve Liesman, a CNBC reporter, made a thought-provoking comment after Fed Chair Powell attended the virtual conference of the Business Council. During the Q&A session, he heard an interesting question. Since the September jobs report came out, all he could say was that there were some rumors circulating in the hallway, all asking, "Did Powell receive the jobs report? Did the Fed get the report?" We don't know for sure as Powell himself did not disclose. But we can't help but feel that he probably—most likely—has it. Adam Button, an analyst from the U.S. financial website investinglive, also noted that Powell's remarks seem to hint at the content of the report. Data since the July meeting shows a significant softening in the labor market; the balance of job growth has fallen significantly; and there are clear downside risks in the labor market. Adam Button speculates that based on these statements, the report may be quite bad. (FXStreet)

On October 15th, Federal Reserve Chairman Powell declared that he would refrain from making comments on the price of gold or Bitcoin. He holds the view that inflation is driven by fundamental supply and demand factors. Additionally, it is still too early to ascertain the impact of artificial intelligence on productivity.

On October 15th, Federal Reserve Chairman Powell declared that the slow transmission risk of tariffs is starting to emerge as persistent inflation. The labor market has presented significant downside risks. As risks become more balanced, policies need to shift towards a more neutral stance. If the Federal Reserve acts too hastily, it may disrupt the anti-inflation task. Data since the July meeting has clearly shown a softening in the labor market. On the contrary, acting too slowly could exert pressure on the labor market. The Federal Reserve will not attempt to fix the equilibrium level of employment; the standard error itself could be 50,000. (FXStreet)

On October 15th, Federal Reserve Chairman Powell expressed that he considers the Fed to have more "flexibility" regarding the size of its balance sheet. Depriving the Fed of the power to pay interest would make rate control extremely complex. In the months ahead, the reduction of the balance sheet will either come to an end or be close to ending. The Fed remains dedicated to holding only Treasury securities on its balance sheet in the foreseeable future. (FXStreet)