The US Employment Situation -- July 2025

STRONG DISSENTS ON FED BOARD. IT WILL ONLY GET STRONGER! “TOO LATE!”

At the most recent Federal Open Market Committee (FOMC) meeting, I dissented because I concluded that cutting the policy rate by 25 basis points was the appropriate stance of policy. In a speech I gave July 17, I laid out the case for cutting the policy rate at the July FOMC meeting and my views have not changed since then. I will recap the reasons for doing so. First, tariffs are one-off increases in the price level and do not cause inflation beyond a temporary increase. Standard central banking practice is to "look through" such price-level effects as long as inflation expectations are anchored, which they are. Second, a host of data argues that monetary policy should now be close to neutral, not restrictive. Real gross domestic product (GDP) growth was 1.2 percent in the first half of this year and is expected to remain soft for the rest of 2025, much lower than the median of FOMC participants' estimates of longer-run GDP growth. Meanwhile, the unemployment rate is 4.1 percent, near the Committee's longer-run estimate, and total inflation is close to our target at just slightly above 2 percent if we put aside tariff effects that I believe will be temporary. Taken together, the data imply the policy rate should be around neutral, which the median FOMC participant estimates is 3 percent, and not where we are—1.25 to 1.50 percentage points above 3 percent. Federal Reserve's Waller Says Data Suggests Monetary Policy Should Now Be Near Neutral, Not Restrictive FED'S WALLER: I DISSENTED BECAUSE I CONCLUDED THAT CUTTING THE POLICY RATE BY 25 BASIS POINTS WAS THE APPROPRIATE STANCE OF POLICY FEDS' WALLER: BELIEVE TARIFFS ARE A ONE-TIME PRICE EVENT THAT POLICYMAKERS SHOULD 'LOOK THROUGH' AS LONG AS INFLATION EXPECTATIONS REMAIN ANCHORED,…

On Wednesday, July 30, 2025, I dissented from the Federal Open Market Committee's (FOMC) decision to maintain the target range for the federal funds rate at its current level. As the Committee's post-meeting statement notes, I preferred to lower the target range for the federal funds rate by 25 basis points.1 Inflation has moved considerably closer to our target, after excluding temporary effects from tariffs, and the labor market remains near full employment. With economic growth slowing this year and signs of a less dynamic labor market, I saw it as appropriate to begin gradually moving our moderately restrictive policy stance toward a neutral setting. In my view, this action would have proactively hedged against a further weakening in the economy and the risk of damage to the labor market. Federal Reserve Official Bowman Says Economy's Growth Is Slowing and Labor Market Is Less Active, So It's Time to Shift Policy Toward Neutral Federal Reserve Official Bowman States That More Focus Should Be Placed on Employment Risks

Too Little, Too Late. Jerome “Too Late” Powell is a disaster. DROP THE RATE! The good news is that Tariffs are bringing Billions of Dollars into the USA!

US CEA's Miran: Job revisions reflect May-June. Data from July is decent.