Fitch: After the Fed's rate cut this month, it is expected to pause, with strong wage growth challenging inflation targets

On December 6, Fitch's chief economist Brian Coulton stated that the Federal Reserve may cut interest rates again this month, but will then take a brief respite. Despite a slight increase in unemployment rate, the potential growth of labor demand remains solid. Over the past three months, employment has increased by 172,000 people per month and if considering distortions from October, it could be close to 200,000 people. Meanwhile, wage growth seems to have bottomed out with an annual increase of 4%, and the annualized growth rate over three months has climbed to 4.4%. This won't prevent the Federal Reserve from cutting interest rates again later this month but will make them pause for thought: A wage growth of 4.4% does not match up with a price inflation of 2%.