Charles Plosser, President of the Federal Reserve Bank of Philadelphia said the unexpected loss of jobs in the U.S. in August doesn't be itself mean interest rates will be lowered.
Concerning a potential rate cut Plosser added: "We want to be careful not to overweight one piece of information. I've not made up my mind at all.
Other Fed bank presidents concurred with Plosser, saying there aren't reliable signs at this time that the housing crisis has spread to the overall economy, and the effects at this time aren't clear.
Talking to the Pennsylvania Association of Community Bankers convention, Plosser also said just because the housing industry is stumbling "does not always imply major problems in the economy as a whole."
The FED and its branches continue to say that inflation is still an important battle they have to fight, and there's no surety the slowdown in prices recently will be sustained over a period of time.
What the FED and its branches are saying is they want much broader data coming in before they make a decision.
"It's a really tricky time right now,'' Plosser said in the interview. "What's really key is how does this affect the outlook. That's what we want to respond to: cumulative data."
This has to send some fear into investors who have talked themselves into believing the pressure on the FED to cut rates will cause them to to it on September 18. From this we see that it's far from a certainty.
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