Fed's Daly: I see more tech in place of hiring as the economy slows - Axios.

Fed's Daly: I see more tech in place of hiring as the economy slows - Axios.

The Federal Reserve is grappling with significant challenges in its efforts to balance inflation control and job market support. Kansas City Fed President Jeffrey Schmid, among other officials, has expressed reservations about further rate cuts, citing high inflation levels and concerns about exacerbating the inflation problem. Schmid's stance is echoed by several Fed officials who argue that deeper rate cuts could lead to higher inflation, thereby undermining the Fed's credibility .

Meanwhile, the Supreme Court's decision to allow Federal Reserve Governor Lisa Cook to remain in her position for now presents a unique scenario. The high court's brief order to hear arguments in January over Trump's effort to remove Cook from the Fed board is a rare instance of the Trump administration not getting its way quickly from the justices in an emergency appeal . This legal battle is part of a broader challenge to the independence of the Federal Reserve, with the court considering whether federal judges have the authority to prevent such firings or only order back pay for wrongly dismissed officials.

The upcoming week brings a fresh batch of inflation data, which could influence the Fed's future decisions on interest rates. Traders are also closely watching manufacturing and retail sales data, as well as quarterly earnings reports from various companies, including Airbnb, Biogen, and Cisco Systems .

The Federal Reserve is navigating a delicate balance between supporting the job market and controlling inflation. While some officials advocate for deeper rate cuts to address job market concerns, others, like Schmid, argue that the Fed must prioritize inflation control. This balancing act is further complicated by the ongoing legal battle over Cook's tenure, which could impact the Fed's ability to act independently.

The economic calendar for the upcoming week includes significant events such as Kansas City Fed President Jeff Schmid's speech and the release of the U.S. trade deficit data. These events will provide further insights into the Fed's thinking and the broader economic landscape.