San Francisco Federal Reserve Bank President Mary Daly stated on Wednesday that there is currently no sense of urgency to lower interest rates and emphasized that officials can "carefully adjust" US monetary policy.
She said in the latest interview, "We don't need to rush. There's no sense of urgency, but we do need to continue to carefully adjust our policies to ensure they align with our current economic situation and our expectations for the future economy
She added that policy makers will discuss the best course of action at the Federal Reserve's meeting on December 17-18. Daley has voting rights in the Federal Open Market Committee (FOMC), which sets monetary policy, this year, but she has not disclosed whether she will support a rate cut at the next Federal Reserve meeting.
Since September this year, Federal Reserve officials have lowered interest rates by 0.75 percentage points.
Federal Reserve Chairman Jerome Powell also stated earlier on Wednesday that given the strong US economy, policymakers can proceed with caution in continuing to lower interest rates. He also stated that the downside risks in the job market seem to have dissipated. Powell also did not disclose whether he supports reducing borrowing costs this month.
It is worth mentioning that Alberto Musalem, the President of the Federal Reserve Bank of St. Louis, also suddenly "hawks" on Wednesday, stating that it may be appropriate to pause interest rate cuts as early as this month.
He stated that he hopes to retain all options before the next meeting of the Federal Reserve on December 17-18, and said that the risk of cutting borrowing costs too quickly outweighs the risk of too little easing. Musalam said that the exact time will depend on the economic situation.
It could be December, it could be January. It could also be later, "he said.
In addition, Thomas Barkin, the President of the Federal Reserve Bank of Richmond, also made a more hawkish speech on Wednesday, expressing support for slowing down the pace of interest rate cuts to bring policy to a "certain level of restraint".
In fact, in recent times, Federal Reserve officials have been avoiding providing too much guidance on the path of interest rates, especially after Trump was re elected as the President of the United States last month. Analysts warn that Trump's promises regarding import tariffs, tax cuts, and crackdown on immigration may alter the economic outlook for the coming months.
And now it seems that the hawkish rhetoric of Federal Reserve officials is not sudden. Earlier this week, several officials stepped down to "play Tai Chi" and remained silent on the prospect of interest rate cuts at the December meeting. They are Chicago Fed President Austan Goolsbee and Federal Reserve Board Member Kugler.
According to them, the Federal Reserve is unable to respond to policies that have not yet been announced. They are all closely monitoring the latest data to weigh the upcoming decisions. There will be a large amount of important data released in the next two weeks, including Friday's monthly job market report and next Wednesday's November Consumer Price Index (CPI).
On the same day, Daley stated that since the specific value of the neutral interest rate is still uncertain, she believes that the Federal Reserve should slowly cut interest rates. She said, "I think we can take it slow and adjust as the economy provides us with more information