On the eve of the release of heavyweight events such as the minutes of the Federal Reserve meeting and the September CPI, several Federal Reserve officials have delivered speeches. Among them are New York Fed President Williams, Fed Governor Jefferson, Boston Fed President Susan Collins, Atlanta Fed President Rafael Bostic, and Fed Governor Adriana Kugler.
Boston Fed President Susan Collins pointed out in a recent speech that her colleagues unanimously believe that there will be two more 25 basis point interest rate cuts this year. As the inflation trend weakens, the Federal Reserve is likely to further cut interest rates.
New York Fed President Williams made it clear in a recent interview that the US economy has laid a solid foundation for a "soft landing". He supports the Fed gradually slowing down the pace of interest rate cuts and expects only a 25 basis point cut in November.
Collins: Core inflation rate expected to return to 2% by 2025
On Tuesday, Collins, the chairman of the Boston Fed and a member of the 2025 FOMC voting committee, stated that as inflation trends weaken, the Federal Reserve is likely to further cut interest rates. Policy makers should adopt a cautious and data dependent approach when lowering interest rates to help maintain the strong momentum of the US economy.
Collins said she is now more confident that while the labor market is developing healthily, inflation will "timely" return to the Federal Reserve's target.
Looking ahead, in order to maintain the current favorable economic situation, it is necessary to adjust the stance of monetary policy to avoid unnecessary suppression of demand. A cautious, data-driven approach to policy normalization would be appropriate in balancing price stability and maximizing employment.
My confidence in the decline of inflation has increased, but the risk of economic slowdown has also increased, which exceeds the level required to restore price stability.
As for the job market, Collins pointed out that recent data, including the unexpectedly strong employment report in September, support my assessment that the overall labor market is still in a good state.
In the future, it will be important to maintain the current healthy labor market conditions, which will require economic activity to continue to approach trend growth, which is my basic expectation. Williams: The economy is ready for a 'soft landing'
As the third in command of the Federal Reserve, Williams expressed his views with a rigorous and steady attitude in a recent interview. He believes that the "extremely impressive" non farm payroll report released in September not only demonstrates the strong resilience of the current economic system, but also further clarifies that the current monetary policy stance does indeed hold an advantageous position. It is expected to continue to push inflation back to the target level of 2% while maintaining strong economic and labor markets.
The implementation of a 50 basis point interest rate cut in September was considered an "appropriate move" in both the current and current environment.
However, this rate cut does not constitute a "fixed pattern of future actions", and the Fed's subsequent decisions will be strictly based on economic data rather than following any "established path", which coincides with the statement of Fed Chairman Powell.
Williams stated that its goal is to adjust interest rates to the "neutral" range in order to gradually release the pressure on demand over time. He also expressed his stance of not wanting to 'witness economic weakness'.
Regarding inflation, Williams predicts that by next year, the inflation rate will approach the 2% target level set by the Federal Reserve.
Bostic: Optimistic about the current economic situation in the United States, but inflation remains too high
During a hosted dialogue in Atlanta in 2024, FOMC Chair Bostic pointed out that the Federal Reserve must balance various competing risks when considering the pace of further interest rate cuts in the coming months.
Although the risk of inflation has decreased, the threat to the labor market has increased, despite the economy remaining strong.
I remain focused on the inflation target and ensure that we can achieve it. Due to the significant decrease in inflation, the task of employment has become more prominent.
Just last month, Bostic stated that he is open to another 50 basis point rate cut if the labor market weakens faster than expected, but if the labor market remains strong, officials "can be more patient".
Regarding the recent hurricane disasters, Bostic pointed out that hurricanes affecting the southeastern United States have a higher frequency and stated that the damage caused by storms can disrupt supply chains and affect certain markets.
Due to the company facing larger compensation amounts, insurance costs are also rising, making it more difficult for people to afford the cost of buying a house. Jefferson: The Federal Reserve has not changed its monetary policy direction
In addition, Federal Reserve Governor Jefferson also stated that the risks facing the Fed's employment and inflation targets are currently almost equal.
The risk balance of our two tasks has changed - with the decrease of inflation risk and the increase of employment risk, these risks have roughly approached balance.
Although the labor market has slowed down from an overheated state, the economy is still growing at a 'steady pace'. He said that the inflation rate is closer to the Federal Reserve's 2% target and will continue to cool down towards this target.
The good news is that the increase in unemployment rate is limited and gradual, and the level of unemployment rate is still at a historical low. Nevertheless, the cooling of the labor market is evident. Kugler: If inflation continues to ease, support further interest rate cuts
Federal Reserve Governor Kugler stated on Tuesday that she strongly supports the Fed's recent interest rate cuts and will support further rate cuts if inflation continues to slow down as she expects.
Although I believe the focus should still be on the goal of continuing to bring inflation back to 2%, I also support shifting attention to maximizing employment within the dual mission of the Federal Open Market Committee (FOMC).
The labor market still has elasticity, but she supports a balanced approach to the FOMC's dual mission, which can continue to make progress on inflation while avoiding an unwelcome slowdown in employment growth and economic expansion.
Kugler believes that the strengthening of the US economy has made the FOMC "patient with timing" in lowering policy rates and focused on reducing inflation.
If the progress in inflation continues as I expect, I will support further cuts in the federal funds rate to gradually shift towards a more neutral policy stance