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    JOLTS Report Shows U.S. Job Openings Steady in September

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    The NewsJob openings changed little in September, the Labor Department announced on Wednesday.There were 9.6 million job openings in September, slightly up from August’s revised total of 9.5 million, according to seasonally adjusted figures from the Job Openings and Labor Turnover Survey. The figure was greater than economists’ expectations of 9.3 million openings. The rate of workers quitting their jobs was flat, at 2.3 percent, for the third straight month.The Federal Reserve closely monitors job openings to understand whether the economy is running too hot.Jim Wilson/The New York TimesWhy It Matters: The Fed looks for signs of a soft landing.The Federal Reserve closely monitors job openings to understand whether the economy is running too hot. Since March 2022, the Fed has tried to fight inflation by raising interest rates to their highest level since 2001.The Fed has remained committed to hitting an annual inflation target of 2 percent without causing a significant spike in unemployment — a combined outcome known as a “soft landing.”Fed officials are expected to maintain a target range of 5.25 to 5.5 percent for interest rates when they meet on Wednesday. The overall trend of slowing job openings is a sign that rate increases have cooled the economy, according to experts.“All of this means the Fed probably doesn’t feel the need to raise rates further, but they’re not going to ease anytime soon,” said Sonu Varghese, global macro strategist at Carson Group, said of the report on job openings.Job openings, which reached a record of more than 12 million in March 2022, have trended down, as has the job-quitting rate, while separations have been flat. As openings rose slightly in September, the number of openings per unemployed worker was flat, at 1.5, the same as August.Less churn in the labor market indicates that rate increases are having an effect, said Julia Pollak, the chief economist at the job search website ZipRecruiter. ZipRecruiter’s latest survey of new employees found that the share of hires who received a pay increase, got a signing bonus or were recruited to their new jobs each fell.Background: ‘More wood to chop’ for the Fed.Job openings remain much higher than they were before the pandemic, and the number of unemployed workers per job opening is much lower. Both are signs of a tight labor market.Inflation also remains above the Fed’s 2 percent target. The Fed’s preferred inflation measure has fallen nearly four percentage points since the summer of 2022, to 3.4 percent.“The Fed’s primary focus remains inflation,” said Sarah House, a senior economist at Wells Fargo. “They’re reading the economy through the lens of ‘What does this mean for the path of inflation ahead?’”According to Stephen Juneau, an economist at Bank of America, the Fed still has “more wood to chop.” His team expects that the Fed will raise rates one more time, in December, to reach a soft landing.Economic growth in the third quarter accelerated, and another measure of wage growth grew faster than expected over the summer. The yield on the 10-year U.S. Treasury bond, a key measure of long-term borrowing costs that undergirds nearly everything in the economy, has reached its highest level since 2007 as the outlook for growth has improved.What’s next: The October jobs report on Friday.The report on Wednesday morning kicked off an important few days in economic news. After Fed officials meet to decide whether to raise rates, October’s jobs report will be released on Friday by the Labor Department.The data is expected to show that hiring slowed, with the addition of 180,000 jobs, according to Bloomberg’s survey of economists, down from September’s 336,000. The unemployment rate is expected to tick up to 3.9 percent, after holding steady at 3.8 percent in September. More

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    Consumers Kept Spending in September, as Inflation Held Steady

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    Overall inflation stayed at 3.4 percent in September, down from a peak of around 7 percent.American consumers spent at a robust clip last month, fresh data showed, as the economy continued to chug along even after more than a year and a half of Federal Reserve interest rates increases.The Fed’s policy moves have been intended to slow demand in order to tamp down inflation. Price increases have been slowing down: Friday’s Personal Consumption Expenditures report also showed that overall inflation held steady at 3.4 percent in September.That was in line with what economists had expected, and is down from a peak of 7.1 percent in the summer of 2022. And after stripping out volatile food and fuel for a clearer sense of the underlying inflation trend, a closely-watched core inflation measure eased slightly on an annual basis.Still, Fed officials aim for 2 percent inflation, so the current pace is still much faster than their goal.The question confronting policymakers now is whether inflation can slow the rest of the way at a time when consumer spending remains so strong. Businesses may find that they can charge more if shoppers remain willing to open their wallets. Friday’s report showed that consumer spending climbed 0.7 percent from the previous month, and 0.4 percent after adjusting for inflation. Both numbers exceeded economist forecasts.The strong spending figures are likely not enough to spur Fed officials to react immediately: Policymakers are widely expected to leave interest rates unchanged at their meeting next week, which wraps up on Nov. 1. But such solid momentum could keep them wary if it persists.“You see inflation still generally trending in the right direction, so I think they’re willing to look past this,” said Carl Riccadonna, chief U.S. economist at BNP Paribas. “If this continues for multiple quarters, then I think that maybe it starts to wear a little bit thin: If you have persistent above-trend growth, then you have to start worrying about what the inflation consequences will be.”Fed policymakers have raised interest rates to 5.25 percent, up from near-zero as recently as March 2022, and many officials have suggested that interest rates are likely either at or near their peak.But policymakers have been careful to avoid entirely ruling out the possibility of another rate increase, given the economy’s staying power.A report yesterday showed that the economy grew at a 4.9 percent annual rate in the third quarter, after adjusting for inflation. That was a rapid pace of expansion, and was even faster than what forecasters had expected.“We are attentive to recent data showing the resilience of economic growth and demand for labor,” Jerome H. Powell, the Fed chair, said in a recent speech, adding that continued surprises “could put further progress on inflation at risk and could warrant further tightening of monetary policy.”Inflation has slowed over the past year for a number of reasons. Supply chains became tangled during the pandemic, causing shortages that pushed up goods prices — but those have eased. Gas and food prices had shot up after Russia’s invasion of Ukraine, but have faded as drivers of inflation this year.Some of those changes have little to do with monetary policy. But in other sectors, the Fed’s higher interest rates could be helping. Pricier mortgages seem to have taken at least some steam out of the housing market, for instance. That could help by spilling over to keep a lid on rent increases, which are a big factor in key measures of inflation.Wrestling inflation down the rest of the way could prove to be more of a challenge. Almost all of the remaining inflation is coming from service industries, which include things like health care, housing costs and haircuts. Such price increases tend to stick around more stubbornly.For now, officials are waiting to see if their substantial rate moves so far will continue to feed through to cool the economy.There are reasons to think that growth could soon slow.“Despite the quarter-to-quarter gyrations in economic data, the Fed feels that it has restrictive policy in place,” said Mr. Riccadonna from BNP. “It’s really just a matter of waiting for the medicine to kick in, to a full degree.”Plus, a recent jump in longer-term interest rates could weigh on the economy. While the Fed sets short term rates directly, those market-based borrowing costs can take time to adjust — and they matter a lot. The jump in long term rates is making it much more expensive to take out a mortgage or for companies to borrow to fund their operations.Plus, consumers have slightly less money to spend: After adjusting for inflation, disposable income declined by 0.1 percent in September, Friday’s report showed. And global instability — including from the war between Israel and Hamas — could add to uncertainty and economic risk.“Despite the quarter-to-quarter gyrations in economic data, the Fed feels that it has restrictive policy in place,” Mr. Riccadonna from BNP. “It’s really just a matter of waiting for the medicine to kick in, to a full degree.” More

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    Inflation Held Steady in September, While Consumers Spent Robustly

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    Overall inflation stayed at 3.4 percent in September, down from a peak of around 7 percent.Inflation remained cooler in September even as consumers continued to spend at a rapid clip, a sign that the economy is chugging along despite the Federal Reserve’s efforts to contain price increases by weighing on demand.Price increases climbed by 3.4 percent in the year through September, based on the Personal Consumption Expenditures index. That was in line with forecasts, and matched the increase in August.After stripping out volatile food and fuel to get a sense of the underlying trend in prices, a core price measure climbed by 3.7 percent, also in line with economist expectations and down slightly from a revised 3.8 percent a month earlier.Fed officials aim for 2 percent inflation based on the measure released Friday — so prices are still climbing much more quickly than normal. But at the same time, price increases have moderated notably compared to the summer of 2022, when the overall P.C.E. measure eclipsed 7 percent. And encouragingly, inflation has come down even as the economy has remained very strong.Friday’s report provided additional evidence of that resilience. Consumer spending continued to grow at a brisk pace last month, picking up by 0.7 percent from the previous month, and 0.4 percent after adjusting for inflation.The question confronting Fed officials now is whether inflation can slow the rest of the way at a time when consumption remains so strong. Businesses may find that they can charge more if shoppers remain willing to open their wallets.Inflation has slowed over the past year for a number of reasons. Supply chains became tangled during the pandemic, causing shortages that pushed up goods prices — but those have eased. Gas and food prices had shot up after Russia’s invasion of Ukraine, but have faded as drivers of inflation this year.Some of those changes have little to do with monetary policy. But in other sectors, the Fed’s higher interest rates could be helping. Pricier mortgages seem to have taken at least some steam out of the housing market, for instance. That could help by spilling over to keep a lid on rent increases, which are a big factor in key measures of inflation.But overall, the economy has been surprisingly resilient to higher borrowing costs. That is keeping the possibility of a further Federal Reserve rate move on the table, though investors still think one is unlikely.Policymakers have raised interest rates to 5.25 percent, up from near-zero as recently as March 2022. Many have suggested that interest rates are likely either at or near their peak. Officials are widely expected to leave interest rates unchanged at their two-day gathering next week, which wraps up on Nov. 1.But policymakers have been careful not to rule out the possibility of another rate increase, given the economy’s continued momentum.A report yesterday showed that the economy grew at a 4.9 percent annual rate in the third quarter, after adjusting for inflation. That was a rapid pace of expansion, and was even faster than what forecasters had expected.“We are attentive to recent data showing the resilience of economic growth and demand for labor,” Jerome H. Powell, the Fed chair, said in a recent speech, adding that continued surprises “could put further progress on inflation at risk and could warrant further tightening of monetary policy.”For now, officials are waiting to see if their substantial rate moves so far will feed through to cool the economy in coming months, especially because longer-term interest rates in markets have moved up notably in recent months. That is making it much more expensive to take out a mortgage or for companies to borrow to fund their operations, and could cool the economy if it lasts. More

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    How High Interest Rates Sting Bakers, Farmers and Consumers

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    Home buyers, entrepreneurs and public officials are confronting a new reality: If they want to hold off on big purchases or investments until borrowing is less expensive, it’s probably going to be a long wait.Governments are paying more to borrow money for new schools and parks. Developers are struggling to find loans to buy lots and build homes. Companies, forced to refinance debts at sharply higher interest rates, are more likely to lay off employees — especially if they were already operating with little or no profits.Over the past few weeks, investors have realized that even with the Federal Reserve nearing an end to its increases in short-term interest rates, market-based measures of long-term borrowing costs have continued rising. In short, the economy may no longer be able to avoid a sharper slowdown.“It’s a trickle-down effect for everyone,” said Mary Kay Bates, the chief executive of Bank Midwest in Spirit Lake, Iowa.Small banks like Ms. Bates’s are at the epicenter of America’s credit crunch for small businesses. During the pandemic, with the Fed’s benchmark interest rate near zero and consumers piling up savings in bank accounts, she could make loans at 3 to 4 percent. She also put money into safe securities, like government bonds.But when the Fed’s rate started rocketing up, the value of Bank Midwest’s securities portfolio fell — meaning that if Ms. Bates sold the bonds to fund more loans, she would have to take a steep loss. Deposits were also waning, as consumers spent down their savings and moved money into higher-yielding assets.Higher Interest Rates Are Here More

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    Powell Says Strong Economic Data ‘Could Warrant’ Higher Rates

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    The Federal Reserve may need to do more if growth remains hot or if the labor market stops cooling, Jerome H. Powell said in a speech.Jerome H. Powell, the chair of the Federal Reserve, reiterated the central bank’s commitment to moving forward “carefully” with further rate moves in a speech on Thursday. But he also said that the central bank might need to raise interest rates more if economic data continued to come in hot.Mr. Powell tried to paint a balanced picture of the challenge facing the Fed in remarks before the Economic Club of New York. He emphasized that the Fed is trying to weigh two goals against one another: It wants to wrestle inflation fully under control, but it also wants to avoid doing too much and unnecessarily hurting the economy.Yet this is a complicated moment for the central bank as the economy behaves in surprising ways. Officials have rapidly raised interest rates to a range of 5.25 to 5.5 percent over the past 19 months. Policymakers are now debating whether they need to raise rates one more time in 2023.The higher borrowing costs are supposed to weigh down economic activity — slowing home buying, business expansions and demand of all sorts — in order to cool inflation. But so far, growth has been unexpectedly resilient. Consumers are spending. Companies are hiring. And while wage gains are moderating, overall growth has been robust enough to make some economists question whether the economy is slowing sufficiently to drive inflation back to the Fed’s 2 percent goal.“We are attentive to recent data showing the resilience of economic growth and demand for labor,” Mr. Powell acknowledged on Thursday. “Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.”Mr. Powell called recent growth data a “surprise,” and said that it had come as consumer demand held up much more strongly than had been expected.“It may just be that rates haven’t been high enough for long enough,” he said, later adding that “the evidence is not that policy is too tight right now.”Economists interpreted his remarks to mean that while the Fed is unlikely to raise interest rates at its upcoming meeting, which concludes on Nov. 1, it was leaving the door open to a potential rate increase after that. The Fed’s final meeting of the year concludes on Dec. 13.“It didn’t sound like he was anxious to raise rates again in November,” said Michael Feroli, chief U.S. economist at J.P. Morgan, explaining that he thinks the Fed will depend on data as it decides what to do in December.“He definitely didn’t close the door to further rate hikes,” Mr. Feroli said. “But he didn’t signal anything was imminent, either.”Kathy Bostjancic, chief economist for Nationwide Mutual, said the comments were “balanced, because there is so much uncertainty.”The Fed chair had reasons to keep his options open. While growth has been strong in recent data, the economy could be poised for a more marked slowdown.The Fed has already raised short-term interest rates a lot, and those moves “may” still be trickling out to slow down the economy, Mr. Powell noted. And importantly, long-term interest rates in markets have jumped higher over the past two months, making it much more expensive to borrow to buy a house or a car.Those tougher financial conditions could affect growth, Mr. Powell said.“Financial conditions have tightened significantly in recent months, and longer-term bond yields have been an important driving factor in this tightening,” he said.Mr. Powell pointed to several possible reasons behind the recent increase in long-term rates: Higher growth, high deficits, the Fed’s decision to shrink its own security holdings and technical market factors could all be contributing factors.“There are many candidate ideas, and many people feeling their priors have been confirmed,” Mr. Powell said.He later added that the “bottom line” was the rise in market rates was “something that we’ll be looking at,” and “at the margin, it could” reduce the impetus for the Fed to raise interest rates further.The war between Israel and Gaza — and the accompanying geopolitical tensions — also adds to uncertainty about the global outlook. It remains too early to know how it will affect the economy, though it could undermine confidence among businesses and consumers.“Geopolitical tensions are highly elevated and pose important risks to global economic activity,” Mr. Powell said.Stocks were choppy as Mr. Powell was speaking, suggesting that investors were struggling to understand what his remarks meant for the immediate outlook on interest rates. Higher interest rates tend to be bad news for stock values.The S&P 500 ended almost 1 percent lower for the day. The move came alongside a further rise in crucial market interest rates, with the 10-year Treasury yield rising within a whisker of 5 percent, a threshold it hasn’t broken through since 2007.The Fed chair reiterated the Fed’s commitment to bringing inflation under control even at a complicated moment. Consumer price increases have come down substantially since the summer of 2022, when they peaked around 9 percent. But they remained at 3.7 percent as of last month, still well above the roughly 2 percent that prevailed before the onset of the coronavirus pandemic.“A range of uncertainties, both old ones and new ones, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little,” Mr. Powell said. “Given the uncertainties and risks, and given how far we have come, the committee is proceeding carefully.”Joe Rennison contributed reporting. More

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    American Household Wealth Jumped in the Pandemic

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    Pandemic stimulus, a strong job market and climbing stock and home prices boosted net worth at a record pace, Federal Reserve data showed.American families saw the largest jump in their wealth on record between 2019 and 2022, according to Federal Reserve data released on Wednesday, as rising stock indexes, climbing home prices and repeated rounds of government stimulus left people’s finances healthier.Median net worth climbed 37 percent over those three years after adjusting for inflation, the Fed’s Survey of Consumer Finances showed — the biggest jump in records stretching back to 1989. At the same time, median family income increased 3 percent between 2018 and 2021 after subtracting out price increases.While income gains were most pronounced for the affluent, the data showed clearly that Americans made nearly across-the-board financial progress in the three years that include the pandemic. Savings rose. Credit card balances fell. Retirement accounts swelled.Other data, from both government and private-sector sources, hinted at those gains. But the Fed report, which is released every three years, is considered the gold standard in data about the financial circumstances of households. It offers the most comprehensive snapshot of everything from savings to stock ownership across racial, wealth and age groups.This is the first time the Fed report has been released since the onset of the coronavirus, and it offers a sense of how families fared during a tumultuous economic period. People lost jobs in mass numbers in early 2020, and the government tried to soften the blow with multiple relief packages.More recently, the job market has been booming, with very low unemployment and rapid wage growth that has helped to bolster incomes. At the same time, rapid inflation has eroded some of the gains by making everyday life more expensive.Without adjusting for inflation, median income would have risen 20 percent, for instance, based on the report released Wednesday.The job market has been booming, and at the same time, rapid inflation has eroded some of the gains by making everyday life more expensive.Hiroko Masuike/The New York TimesThe financial progress, particularly for poorer families, is especially remarkable when compared with the aftermath of the last recession, which lasted from 2007 to 2009. It took years for household wealth to rebound fully after that crisis, and for some families it never did.Income climbed across all groups between 2019 and 2022, though gains were biggest toward the top — meaning that income inequality widened.That made for a big difference between median income — the number at the midpoint among all households — and the average, which tallies all earnings and divides them by the number of households. Average income climbed 15 percent, one of the largest three-year pops on record.Wealth inequality was more complicated. Because the rich hold such a large share of financial assets in America, wealth gaps tend to grow in absolute terms when stocks, bonds and houses are climbing in price. True to that, wealth climbed much more in dollar terms for rich families.But in the three years covered by the survey, growth in wealth was actually the largest in percentage terms for poorer families. People in the bottom quarter had a net worth of $3,500 in 2022, up from $400 in 2019. Among families in the top 10 percent, median net worth climbed to $3.79 million, up from $3.01 million three years earlier.Because of the way the data is measured, it is difficult to break out just how much pandemic-related payments would have mattered to the figures. To the extent that families saved one-time checks and other help they received during the pandemic, those would have been included in the measures of net worth.Families were also still receiving some pandemic payments when the income measures were collected in 2021, which means that things like enhanced unemployment insurance probably factored into the data.Some Americans appear to have taken advantage of their improved financial positions to invest in stocks for the first time: 21 percent of families owned stocks directly in 2022, up from 15 percent in 2019, the largest change on record. Many of those new stock owners appear to have been relatively small investors, likely reflecting at least in part Americans’ enthusiasm for “meme stocks” like GameStop during the pandemic.The Fed’s newly released figures show that significant gaps in income and wealth persist across racial groups, although Black and Hispanic families saw the largest percentage gains in net worth during the pandemic period.Black families’ median net worth climbed 60 percent, to $44,900. That was a bigger jump than the 31 percent increase for white families, which lifted their household wealth to $285,000. Hispanic families saw a 47 percent increase in net worth.At the same time, racial and ethnic minorities saw slower income gains in the period through 2021. Black and Hispanic households saw small declines in earnings after adjusting for inflation, while white families saw a modest increase.For the first time, the report included data on Asian families, who had the highest median net worth of any racial or ethnic group.While the data in the report is slightly dated, it underscores what a strong position American families were in as they exited the pandemic. Solid net worth and growing incomes have helped people to continue spending into 2023, which has helped to keep the economy growing at a solid pace even when the Fed has been lifting interest rates to cool it down.That resilience has stoked hope that the Fed might be able to pull off a “soft landing,” one in which it slows the economy gently without crushing consumers so much that it plunges America into a recession. More

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    Inflation Slowdown Remains Bumpy, September Consumer Price Data Shows

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    Prices are rising at a pace that is much less rapid than in 2022, but signs of stalling progress are likely to keep Federal Reserve officials wary.Consumer prices grew at the same pace in September as they had in August, a report released on Thursday showed. The data contained evidence that the path toward fully wrangling inflation remains a long and bumpy one.The Consumer Price Index climbed 3.7 percent from a year earlier. That matched the August reading, and it was slightly higher than the 3.6 percent that economists had predicted.The report did contain some optimistic details. After cutting out food and fuel prices, both of which jump around a lot, a “core” measure that tries to gauge underlying price trends climbed 4.1 percent, which matched what economists had expected and was down from 4.3 percent previously. And inflation is still running at a pace that is much less rapid than in 2022 or even earlier this year.Even so, several signs in the report suggested that recent progress toward slower price increases may be stalling out — and that could help to keep officials at the Federal Reserve wary.The S&P 500 fell 0.6 percent and the yield on 10-year Treasuries rose on Thursday to 4.7 percent, as investors worried that September’s inflation report showed less progress than they had hoped for, both in rents and a measure of inflation that strips out volatile goods and services.Fed policymakers have been raising interest rates in an effort to slow economic growth and wrestle inflation under control. They have already lifted borrowing costs to a range of 5.25 to 5.5 percent, up sharply from near-zero 19 months ago. Now, they are debating whether one final rate move is needed.Given the fresh inflation data, economists predict that policymakers are likely to keep the door open to that additional rate increase until they can be more confident that they are well on their way to winning the battle against rising prices. Inflation has begun to flag, but the September data served as a reminder that it is not yet clearly vanquished.“This report still suggests that we have stepped out of the higher inflation regime,” said Laura Rosner-Warburton, a senior economist at MacroPolicy Perspectives. Still, “we’re not out of the woods — there are still some sticky corners of inflation.” More

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    Investors Are Calling It: The Federal Reserve May Be Done Raising Rates

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    Investors doubt that central bankers will lift borrowing costs again following big market moves that are widely expected to cool growth.Investors are betting that the Federal Reserve, which has raised interest rates to their highest levels in 22 years, may finally be finished.Several top Fed officials have indicated in recent days that the central bank’s effort to cool the economy through higher borrowing costs is being amplified by recent market moves that are essentially doing some of that job for them.In particular, attention has focused on a run-up in interest rates on U.S. government debt, with the yield on the 10-year Treasury bond briefly touching a two-decade high last week. That yield is incredibly important because it acts as the market’s foundation, underpinning interest rates on many other types of borrowing, from mortgages to corporate debt, and influencing the value of companies in the stock market.Philip N. Jefferson, the vice chair of the Fed, said this week that although “it may be too soon to say confidently that we’ve tightened enough,” higher market rates can reduce how much businesses and households spend while depressing stock prices. He added that the Fed wanted to avoid doing too much and hurting the economy unnecessarily.Given that, he said the Fed “will be taking financial market developments into account along with the totality of incoming data in assessing the economic outlook.”Investors have sharply reduced expectations of another rate increase before the end of the year. They see about a one-in-four chance that policymakers could lift rates again.“If financial conditions are tightening independent of expectations for monetary policy” then “that will reduce economic activity,” said Michael Feroli, the chief U.S. economist at J.P. Morgan. “Things change, you change your forecast.”Investors have expected the Fed to stop raising interest rates before and been proven wrong. There is still a chance now that the market dynamics that are helping to raise borrowing costs could reverse, and this week, some of the recent pop in the yield on 10-year bonds has eased. But if market rates stay high, it could keep adding to the substantial increase in borrowing costs the Fed had already ushered in for consumers and companies.Philip Jefferson, the vice chair of the Federal Reserve, said that “it may be too soon to say confidently that we’ve tightened enough to return inflation.”Ann Saphir/ReutersThe Fed has raised its key interest rate from near zero to above 5.25 percent over the past 19 months in an attempt to tame inflation. But the Fed directly controls only very short-term rates. It can take a while for its moves to trickle through the economy to affect longer-term borrowing costs — the kind that influence mortgages, business loans and other areas of credit.There are likely several reasons those longer term rates in markets have climbed sharply over the past two months. Wall Street may be coming around to the possibility that the Fed will leave borrowing costs set to high levels for a long time, economic growth has been strong, and some investors may be concerned about the size of the nation’s debt.Over time, the rise in yields on Treasury bonds is likely to weigh on the economy, and Fed officials have been clear that it could do some of the work of further raising interest rates for them.Officials had forecast in September that they might need to make one more rate move this year. But comments by Mr. Jefferson, along with some of the Fed’s more inflation-focused members have been widely seen as a signal that the Fed is likely to be more cautious.Christopher J. Waller, a Fed governor who has often favored higher rates, said at an event on Wednesday that officials were in a position to “watch and see” what happens, and would keep a “very close eye” on the move and “how these higher rates feed into what we’re going to do with policy in the coming months.”Lorie K. Logan, president of the Federal Reserve Bank of Dallas, said on Monday that higher market yields “could do some of the work of cooling the economy for us, leaving less need for additional monetary policy tightening.”But she noted that it would depend on why rates were rising. If they had climbed because investors wanted to be paid more to shoulder the risk of holding long-term bonds, the change was likely to squeeze the economy. If they had climbed because investors believed the economy was capable of growing more strongly even with high rates, it would be a different story.The yield on 10-year Treasury bonds soared to its peak this month, a sharp move that has subsequently jolted mortgage rates.Caitlin O’Hara for The New York TimesEven Michelle W. Bowman, a Fed governor who tends to favor higher rates, has softened her stance. Ms. Bowman said on Oct. 2 that further adjustment would “likely be appropriate.” But in a speech she delivered on Wednesday, that wording was less definitive: She said policy rates “may need to rise further.”The softer tone among Fed officials appears to have helped halt the rise in market rates, with the yield on the 10-year Treasury bond easing 0.2 percentage points so far this week. On Tuesday, the yield fell by the most in a day since the turmoil induced by the banking crisis in March. That likely reflected investors who rushed to the safety of U.S. government debt as war broke out in Israel and Gaza. Still, the yield remains around 4.6 percent, roughly 0.8 percentage points higher than at the start of July.“It seems like there is a little skittishness,” said Subadra Rajappa, head of U.S. rates strategy at Société Générale.Higher interest rates also typically weigh on stock prices, with major indexes under pressure over the summer alongside the rise in yields. The S&P 500 suffered its worst month of the year through September but has risen 2 percent so far this month, alongside retracing yields.Policymakers will get another read on the effect of rate rises with the release of the Consumer Price Index on Thursday. Economists expect the data to show a gradual slowdown in inflation is continuing, despite the unexpected resilience of the economy.That could change, however, especially if yields continue to fall, relieving some of the pressure on the economy.A robust economy could keep the possibility of another Fed rate move alive, even if investors see it as unlikely. Ms. Logan warned that policymakers should avoid overreacting to market moves if they quickly fade.And Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said on Tuesday that long-term rates might have moved up in part because investors expected the Fed to do more. Therefore, if the Fed signals that it will be less aggressive, they could retreat.“It’s hard for me to say definitively — hey, because they have moved, therefore we don’t have to move,” Mr. Kashkari said. “I don’t know yet.” More