Federal Reserve Official Signals Readiness to Adjust Rates Based on Inflation and Jobs Data

A Federal Reserve official said the central bank is prepared to raise interest rates if disinflation does not appear. The official added that the bank would also be ready to cut rates if the labor market deteriorates. The remarks addressed the timing of potential policy moves in response to incoming economic data.

Officials have previously tied rate decisions to observed trends in both inflation and employment. The official warned that job losses linked to artificial intelligence could occur before productivity gains from the technology materialize. No specific timeline for any rate action was provided.

Reserve communications in recent months have emphasized data dependence for future interest-rate decisions. Markets continue to monitor labor-market indicators and inflation readings for signals on the next policy step.