Recent poor U.S. jobs data has led Fed officials to indicate support for rate cuts, with predictions of the first cut in September. The labor market's deterioration includes a loss of 258,000 jobs from earlier estimates and an increase in unemployment to 4.2%. FOMC members have shown dissent regarding current rates, with regional bank presidents also calling for adjustments. Neel Kashkari and Mary Daly have expressed the need to reconsider the federal funds rate based on current economic conditions.
"There's two categories of data that I'm focused on: There's a bunch of data that I know and that I've got confidence in, and there's data that I don't know and we're not going to know for a while. The data that I think we know is that the economy is slowing... and that means in the near term it may become appropriate to start adjusting the federal funds rate."
"My own assessment is that the risks to our employment and inflation goals are roughly balanced. Inflation, absent the labor market changes we've seen, suggests we can be targeting those two categories as we make decisions going forward."
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