Fed officials rule out preemptive rate cuts despite hiring slowdown

Federal Reserve officials described the US labor market as “resilient” despite July’s weak jobs report, signaling no need to rush interest rate cuts.

New York Fed President John Williams told The Wall Street Journal that while job growth is slowing, labor market conditions remain strong.

Cleveland Fed’s Loretta Mester and Atlanta Fed’s Raphael Bostic both shared a similar sentiment, saying policymakers could wait for more data on inflation and employment before deciding on slashing interest rates.

Williams said he remains open to cutting rates but emphasized the importance of ensuring inflation stays under control. He expects inflation to gradually reach the 2% target next year but prefers a cautious stance.

He noted inflation may edge higher this year due to tariffs but is expected to decline in 2026, adding that the labor market remains tight with low unemployment and few layoffs.

Following the July jobs report, which showed a marked hiring slowdown over the past three months, Wall Street raised its bets on a potential rate cut in September.