Gold near record high as US interest rate cut expectations grow – business live

06.57 EDT WSJ: Fed\\'s Kashkari says it is appropriate to debate September rate cut\n\nNewsflash: A second policymaker at the US Federal Reserve is leaning towards cutting interest rates.\n\nIn an intervew with the Wall Street Journal (WSJ), Minneapolis Fed President Neel Kashkari said it was appropriate to debate potentially cutting U.S. interest rates in September. He cited the rising possibility of a weakening labor market.\n\nKashkari told the WSJ:\n\n“The balance of risks has shifted, so the debate about potentially cutting rates in September is an appropriate one to have.”\n\nThat’s another significant intervention, after Fed policymake Mary Daly told the FT it is time to consider adjusting borrowing costs (see opening post).\n\nThe Federal Open Market Committee, which sets US interest rates, is next scheduled to meet on 17 and 18

September.\n\nKashkari’s concerns about a rising possibility that the labor market weakens too much comes after a slowdown in hiring in July.\n\nJuly’s jobs report also showed that the US unemployment rate rose to 4.3% last month.\n\nThat triggered the Sahm

Rule, which states that the US economy is in recession when the three-month moving average of the unemployment rate increases by at least 0.5% from its trough over the previous 12 months.\n\nThat was why Goldman Sachs hiked the probability of a US recession from 15% to 25% this month. But, they have now cut it back to 20% last weekend (see earlier post), pointing out that retail sales and jobless claims data show no sign of recession.\n\nSahm herself has argued that the US is not actually in recession, and fears the current rise in the unemployment rate is overstating the recessionary dynamics. The rise in the jobless rate is due to rising worker supply, not just weaker demand, she wrote here.\n\n""The US is not in a recession, despite the Sahm Rule indicator bearing my name saying that it is. That said, the risk of a recession is elevated, strengthening the case for the US Federal Reserve to cut interest rates.""https://t.co/HqsArp0RR8 my @opinion — Claudia Sahm (@Claudia_Sahm) August 7, 2024