German Central Cooperative Bank: US Economic Data Does Not Support a Significant Fed Rate Cut
Gold Finance reports that Birgit Henseler, an analyst at the German Central Cooperative Bank, said that the money market is still divided on whether the first rate cut by the Federal Reserve will be 25 basis points or 50 basis points, but there are several reasons why the Fed should not take major action. "Neither the labor market data nor the recently published inflation figures indicate any need for a significant rate cut," she said in a report. Henseler said the labor market situation indicates a slowdown in the economy, not a recession, and core inflation has recently proven more stubborn than many market participants expected, driven by rising housing and other service costs.