The US Federal Reserve recently cut interest rates, citing slowing inflation and job growth. However, they face a dilemma: mixed data and a strong economy make further decisions challenging.

Mixed economic signals

Last month saw a half-point rate cut to 4.75%-5%. However, the Fed is now cautious due to conflicting data. Christopher Waller noted, 'We need to move slower now than we did in September.' Meanwhile, the consumer price index showed an increase, and the labor market added 254,000 jobs.

The jobs report wild card

In the coming weeks, the Fed will face unusual statistical shifts due to hurricanes in the southern states and strikes at companies like Boeing. A temporary loss of over 100,000 jobs is expected. Waller believes that despite this, inflation could reach its 2% target while maintaining a strong labor market.

Is the Fed even in control?

Some analysts believe the Fed's influence on the economy is limited. NYU economist Aswath Damodaran argues, 'Markets respond to real economic factors, not Fed policy.' Critics believe Jerome Powell's influence is only on short-term interest rates.

The Federal Reserve faces complex sentiments in the economy. The prospect of rate cuts has raised questions among experts. Whether the Fed is a leader or follower in economic policy remains debatable.