Several Federal Reserve officials who spoke on Wednesday said labor market worries continue to animate their belief that rate cuts still lie ahead for the central bank.

"I've been clear that I think we should be cutting at the next meeting," Federal Reserve Governor Christopher Waller said in an interview with CNBC, reiterating the view he has held for some time and led him to dissent at the late July Fed meeting in favor of an easing. "You want to get ahead of having the labor market go down because usually when the labor market turns bad, it turns bad fast," he said.

He added that a rate cut at the September 16-17 Federal Open Market Committee meeting would not put monetary policy on a pre-set course of lowering borrowing costs and data will drive what the central bank does. But, "I would say over the next three to six months, we could see multiple cuts coming in."

Atlanta Fed President Raphael Bostic also reiterated his view that a rate cut is in the cards although he did not say how soon it might happen. He wrote in an essay that "today, I judge policy to be marginally restrictive." He added, "while price stability remains the primary concern, the labor market is slowing enough that some easing in policy probably on the order of 25 basis points will be appropriate over the remainder of this year."

And in a hometown speech, Minneapolis Fed leader Neel Kashkari said with the neutral fed funds rate around 3%, "that suggests that interest rates have some room to come down gently over the next couple of years." The official also declined to say when he believes the Fed should cut rates given the uncertainties created by trade policy.

The Fed's meeting later this month is viewed by investors as a lock for a quarter percentage point cut in what is now a 4.25% to 4.5% federal funds interest rate target range.

The market's confidence is rooted in comments made by Fed Chair Jerome Powell late last month at the Kansas City Fed's Jackson Hole, Wyoming research conference when he said, "with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."

In weighing a rate cut, Fed officials are trying to balance their legally mandated mission of keeping inflation low and the job market as strong as it can be without creating price pressures.

Many Fed officials, as well as many private sector economists, are concerned inflation is too high and likely to get higher in response to President Donald Trump's huge increase in import taxes. Kashkari noted because of these factors, "we're getting into a tricky position" for Fed policy.

Source: Investing.com