Analysis: If the labor data disappoints again, Powell may have the opportunity to convince colleagues to support a 50 basis point rate cut.

When the Federal Reserve announced its decision on September 18, the forecast showed that the vast majority of officials supported lowering the Benchmark Interest Rate by a full percentage point or more this year, which means at least one substantial rate cut. However, a significant number of people also believe that only 75 basis points are needed, indicating support for three smaller rate cuts.
But in the end, all but one of the 12 voting members of the Federal Open Market Committee (FOMC) supported Powell's 50 basis point rate cut. This was a crucial victory for Powell as he seeks to prolong an economic expansion that many had predicted was already over. The only dissenter, Fed Governor Bowman, called for a more moderate pace of rate cuts to avoid undermining progress on inflation.
Economists say that if the economy starts to decline, there is a possibility of another 50 basis point rate cut, as long as inflation cools down, Powell will prioritize keeping the economy close to full employment. If labor market data disappoints again, Powell may have the opportunity to persuade his colleagues to cut rates by another 50 basis points in the coming months. Some officials have indicated in recent speeches that they are likely to support another 25 basis point rate cut, but have also left the door open for a larger rate cut.