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Federal Reserve official says hot labour market will not derail plans for interest rate cuts

Unexpectedly strong employment numbers for January masked ‘some moderation’, says Loretta Mester

A top Federal Reserve official has insisted that the US’s hot labour market is continuing to cool, in a sign that last month’s unexpectedly strong employment numbers will not derail plans by rate setters to cut borrowing costs this year.

Loretta Mester, president of the Cleveland Federal Reserve and one of the officials who votes on interest rates, said last week’s jobs report for January showed the labour market was “remarkably resilient” — but said other indicators pointed “to some moderation”.

“At this point, I suspect we will see further moderation of wage growth, with a gradual slowing in job growth and an uptick in the unemployment rate over the year from its very low level,” she said.

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