Ken Rogoff on Risks Facing US Fiscal Health

September 5, 2025, Video: "Ken Rogoff, professor at Harvard University, former IMF Chief economist, and author of "Our Dollar, Your Problem," joins to discuss the US economy and jobs market, as well as his book on the dollar and Washington DC's spending crisis. Disappointing employment data released Friday validated fears that the US labor market may be on the brink of a downturn and lifted expectations for how much the Federal Reserve will lower interest rates this year. Investors are now fully pricing in a quarter-point rate cut at the Fed’s Sept. 16-17 policy gathering. They also pushed closer to anticipating a total of three rate cuts this year, according to futures contracts. Some Fed watchers said the weak jobs data could spur officials to consider a larger-than-typical half-point this month, though inflation data due next week could temper those expectations. “There’s no question they’re going to cut a quarter point,” said Diane Swonk, chief economist for KPMG. “This underscores that the cracks in the labor market are getting wider and that is problematic.”"