Institution: Stubborn price data undermines the Fed's easing plans

ChainCatcher news, SMBC Nikko Securities Chief Economist Joseph Lavorgna wrote that recent inflation and labor cost data have raised questions about the wisdom of the Federal Reserve's interest rate cut today.

He pointed out that the data released today showed that unit labor costs increased by 3.4% over the past four quarters ending in September, while the core services inflation rate in the third quarter rose by 4.4% year-on-year, well above the Federal Reserve's overall inflation target of 2%. "This makes us wonder why the Federal Reserve is so bold in cutting rates this month," Lavorgna wrote. "Isn't it more prudent to wait and see how the labor market evolves after the hurricane and the Boeing workers' strike? What harm would there be in waiting for clearer data before making a rate cut at next month's meeting?" (Jin Shi)