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Inflation ran even cooler in August than Wall Street expected and the economy is expanding steadily, so the Fed can make another large cut in interest rates at its next meeting in November, right?Not so fast.If inflation slows faster than the Fed expected, the thinking goes, the central bank could also lower interest rates in bigger chunks to help ensure the labor market remains healthy.The Fed’s biggest focus now is preventing a sharp increase in unemployment. The jobless rate has crept up to 4.2% from 3.% in the spring of 2023.Yet the latest info on household incomes, savings rates and gross domestic product also show the economy is stronger than commonly assumed.If the Fed cut rates too aggressively, some say, it could speed up the economy and put upward pressure on inflation.For now it appears the Fed is likely to move cautiously and cut rates in smaller increments.”The resilience of the economy points to a more gradual pace of rate cuts ahead,” said Michael Pearce, deputy chief U.S. economist at Oxford Economics.Of cou …
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