President Donald Trump on Thursday nominated Stephen Miran, chairman of the Council of Economic Advisors, to the Federal Reserve Governor Adriana Adina for the remaining term of the Gogle. Trump said that Maran will serve in the role by January 31, 2026, while he will continue to search for a permanent alternative. The Senate will probably confirm his nomination soon and the FOMC before the September meeting.
If so, if the committee votes to approve a reduction in the Federal Fund Rate (FFR) in September, at least three differences can be created on the FOMC. They will argue that a weak labor market justifies. If the feed cuts the FFR, there may be a new group of dissent. They may be objected that the reduction in the rate is at risk of inflation.
The current major debate is whether the weakness in the Friday employment report reflects a labor market in which the demand for labor is weakening or lack of labor. Both can be at the same time.
Demand, many employers postponed their services plans due to Trump’s tariff riot (TTT) since April unless they believe the impact of TTT on their business. If so, it should now be less uncertain about it, and hiring them should resume. In this case, the feed should be kept on cutting the FFR, and the dissent will not agree.
In our opinion, the problem is mainly toward the labor market (chart). The Labor Force has stopped growing so far this year as a result of the ongoing deportation of the Trump administration’s border, as a result of the ongoing deportation. In this case, the feed should also be kept on cutting the FFR as it will increase the reduction of labor shortages, which will increase the wages and prices of inflation.
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