US consumer confidence fell in September, with Conference Board index slipping to 94.2 from 97.8, missing expectations of 95.9 and marking the weakest reading since April. Present Situation Index dropped -7 points to 125.4, its largest decline in a year. Expectations Index edged lower by -1.3 points to 73.4, remaining below the recession threshold of 80 for the eighth consecutive month.

According to Stephanie Guichard of the Conference Board, the present situation component registered its largest drop in a year, with consumers less positive on business conditions and increasingly cautious about job availability. She noted that the appraisal of current job openings has now declined for nine straight months to a multi-year low.

While consumers were somewhat more pessimistic on future jobs and business conditions, optimism over future incomes improved. That helped limit the drop in the Expectations Index, but overall sentiment points to lingering household caution heading into Q4.

Full US consumer confidence release here.

In a speech today, Boston Fed President Susan Collins acknowledged that the outlook is “highly uncertain.” However, she acknowledged that inflation risks tied to the labor market have diminished. Thus, “the upside inflation risks I was concerned about a few months ago are more limited,” she added.

Against this backdrop, Collins said she is open to more cuts if conditions justify them. “In this context, it may be appropriate to ease the policy rate a bit further this year – but the data will have to show that,” she cautioned.

Overall, She emphasized that policy should remain “modestly restrictive” to restore price stability while guarding against further labor market weakening.

Fed Vice Chair Philip Jefferson said in a speech today while tariffs have added to price pressures, the impact has been “lower than what many forecasters predicted” this spring. Encouragingly, short-term expectations have eased from Q2 highs, while long-term expectations remain anchored. As a result, he expects the disinflation process to “resume after this year” and inflation to eventually return to the Fed’s 2% target “in the coming years”.

On the labor side, Jefferson highlighted softening conditions. He warned that the job market could “experience stress” if left unsupported, and said this was a key reason he backed a 25bp rate cut at the last FOMC meeting.

Looking ahead, Jefferson stressed that policy will remain data-dependent, with the Fed monitoring both economic indicators and government policies.

Full speech of Fed’s Jefferson here.

St. Louis Fed President Alberto Musalem said monetary policy is now “somewhere between modestly restrictive and neutral.”

Musalem, who votes on policy this year, said he is “open minded” to further rate cuts but stressed that caution is needed. With limited room before policy turns “overly accommodative”, he signaled the Fed should proceed carefully.

New York Fed President John Williams said overnight that it made sense for the central bank to ease policy “a little bit” to reduce restrictiveness to support the labor market while maintaining downward pressure on inflation.

Williams acknowledged progress toward the 2% inflation target but cautioned that more work remains. He underscored the Fed’s dual mandate, stressing the need to avoid “undue harm” to employment at a time when job creation has been gradually weakening. “I don’t want to see that go too far,” he said.

Encouragingly, Williams noted that some inflation worries have eased “”The tariff effects have been smaller than most people thought, and there doesn’t seem to be any signs of inflationary pressures building,” he noted.

Cleveland Fed President Beth Hammack said today she remains concerned about inflation, which she described as still too high across headline, core, and especially services. In a CNBC interview, She reminded that the Fed has missed its 2% mandate for over four years, a persistence that continues to weigh heavily on her outlook.

By contrast, Hammack described the labor market as “reasonably healthy” and broadly balanced, reducing the urgency for further cuts. She warned that inflation may not return to 2% until late 2027 or even early 2028.

Balancing the Fed’s dual mandate, Hammack argued the central bank must maintain a “restrictive stance of policy so that we can get inflation back down to our goal”