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A "risk management cut" from Fed due to a change in the NAIRU?
From the lack of conviction in the previous meetings to this week’s “risk management cut,” Federal Reserve (Fed) officials continue to walk a very fine line, hoping for the effects of tariffs to be transitory while, at the same time, trusting that the recent weakness in the labor market is more of a combination of lower supply of labor (due to a declining labor force and deportations) as well as weakening demand for workers. Both of which are keeping the rate of unemployment near full employment, but in an environment of an economy that is showing signs of weakening. Up until this week, a still historically low ... (full story)