Fed Officials Diverge on Rate Cuts as Job Market Softens

Markets largely expect a quarter-point reduction at the Oct. 28–29 meeting.

Overview

New York Fed President John Williams told the New York Times he is focused on downside labor risks and is comfortable with further easing this year.
San Francisco Fed President Mary Daly warned the softening job market could become more worrisome without risk management and said recent and potential cuts are meant to rebalance goals.
Fed Governor Michael Barr urged caution on additional cuts, emphasizing inflation risks, tariff-related pressures, and forecasting core PCE above 3% by year-end.
September’s 11–1 rate cut masked deeper divisions, as minutes showed some preferred no move while many policymakers projected at least two more quarter-point reductions this year.
Interest-rate futures assign roughly a 95% chance to a quarter-point cut on Oct. 28–29, with data gaps from a government shutdown complicating the Fed’s assessment.