Source: Cailian
News of the 25th of September (editor 黄君芝)Following last week's opening of this year's "first drop", the Fed has been frequently fearing "the eagle wind" for the past two days.Finally, San Francisco Federal Reserve Bank Governor Mary Daly said Wednesday that she "fullly supported" the Fed's decision to cut interest rates last week.Further interest rate reductions are expected in the future.
She said at the David Eccles School of Business at the University of Utah: "Will they act now, this year, or later? It's hard to say, but what really matters is that making these policy adjustments may require balancing our two goals--Maintain inflationary pressures to bring them to price stability; at the same time, provide support for the labor market to ensure it is close to full employment."
Daley also said,She expects no recession and denies that the economy is moving toward a “stagnant” environment of high inflation and high unemployment.
She explained that excluding tariff-fueled commodity inflation, inflation could be around 2.4% or 2.5%, which is still too high compared to the Fed's 2% target, but is getting closer to it. She said that although the labor market has cooled and can no longer be called solid, she wouldn't say it's weak either.
Daley said: “I’d like to say it’s sustainable, but... I don’t want to see the economy weaken further.That’s why interest rates are determining very directly in part: you’re providing some insurance to support the labor market.
“The U.S. economy still needs monetary policy constraints, but not as much as it used to be.”She added.
Last week, the Federal Reserve announced that it had lowered interest rates by 25 basis points, ranging from 4.00% to 4.25%, opening the first rate cuts since this year, but the spot chart showed that there were huge differences within the Federal Reserve over future rate cuts. Of the 19 Federal Reserve officials, 10 said they would be cutting interest rates twice or more this year, while the other 9 said they would be cutting interest rates once more and not even lower interest rates.
Daley added to Fed Chairman Powell's statement, saying the forecasts were not promising, and pointed out that the Fed's actual interest rate decision-making may require an assessment of the balance between the Fed's two goals.
But clearly, Daley's optimistic views are not mainstream, and the Federal Reserve is still in the "eagle wind",Several officials have previously "spit cold water" on the prospect of interest rate cuts.For example,U.S. Chairman of the Cleveland Federal Reserve, Bets HamakGiven that inflation is still above the Fed’s 2% target and continues to exist, the Fed needs to be “very cautious” in removing restrictive monetary policies.
St. Louis Fed President Alberto MusalemSaid he supported the Federal Reserve's decision to cut interest rates last week as an insurance measure against the weak labor market. At the same time, he also pointed out that with inflation still high, the bank has limited room for further interest rate cuts.
Atlanta Federal Reserve Chairman BostikHe also said he was pleased with last week’s interest rate cuts, but not much need for further easing this year, “I’m worried that inflation has been too high for a long time.Pigeons and Chicago Federal Reserve Chairman GullsbyIt also warned that the Federal Reserve should not go on to continuously reduce interest rates.