Former Federal Reserve Economist: A 50 basis point cut in September may not necessarily be a mistake

Claudia Sahm, Chief Economist at New Century Advisors and former Federal Reserve economist, believes that the Federal Reserve absolutely had reason to cut interest rates by 50 basis points in September. The proposer of the "Sahm Rule" stated in an interview: "There is definitely a reason to cut interest rates by 50 basis points, especially if you think that they should have started cutting by 25 basis points as early as July." She believes that it's not fair to blame the Fed for information or data it didn't have at some point in the past, especially now when looking back we can see that the slowdown in the U.S. labor market was more severe than previously thought. Therefore, a rate cut of "50 basis points is not necessarily wrong," but rather a "recalibration" of policy to get it back on track.