Several U.S. central bank officials signaled this week that the Fed still has time to assess economic data before deciding on another interest rate hike. Cleveland Fed President Beth Hammack said the September U.S. employment report was consistent with recent hiring trends and that she still has time to consider the direction of monetary policy. Hammack said in an interview on PBS NewsHour that September employment rose by only 29,000 jobs, while the unemployment rate edged up to 4.2%, and over the past 12 months employment has risen by an average of 41,000 jobs per month, which is close to the level she estimates to be the breakeven point for the labor market, reflecting that the labor market appears to be stabilizing. She said the Fed will receive much more data before its meeting late this month, so there is still time to decide what the appropriate course of monetary policy should be so that the Fed can achieve both sides of its mandate: maintaining price stability and promoting maximum employment. Hammack is one of the Fed officials who has consistently supported raising interest rates to control inflationary pressures that she and other Fed officials view as still elevated. Last month, the Fed raised its target interest rate range by 0.25% to 3.75%-4%, with Fed officials expecting another rate hike before the end of the year. However, comments from Fed officials this week indicate that the Fed is likely to hold off on rate action at the Federal Open Market Committee meeting scheduled for Oct. 27-28.
Fed officials signal they can wait before hiking again, implying the policy rate is likely to stay put at the Oct. 27-28 meeting rather than rise.
Expectations that the Fed will hold off on another rate hike at this month's meeting push the 10-year Treasury yield lower.
