Claudia Sahm, a former Fed economist and chief economist at New Century Advisors, said in an interview on Friday: "Since the last Fed meeting, we've had two more months of good inflation data, and that's what the Fed is asking for." The question now, however, is how much action the Fed should take. Financial marekt, which acts as a compass for the direction of the central bank, hasn't helped in this regard. According to CME Group's Fed Watch tool, the futures market focused on a 25 basis point cut for much of last week, but on Friday, traders turned to an almost equal probability of a 25 or 50 basis point cut Sam is among those who think the Fed should do more. "The inflation numbers alone are enough for us to cut 25 basis points next week, and there will be a series of rate cuts after that," she said. She believes the federal funds rate is already above 5 per cent and has been fighting inflation for more than a year. "The battle is won and they need to start cutting rates," she said. That means cutting 50 basis points from the start as a way to prevent a potential labor market recession. "The labour market has softened since last July, so there is some recalibration," she said. "We have more information. Fed officials need to make this 50 basis point cut and be ready for further action."