According to Zhītōng Finance App, Federal Reserve Bank of Chicago President Charles Evans said Friday that if inflation data in the coming months is as good as the May Consumer Price Index, the Fed may consider cutting interest rates. He pointed out that a strong labor market means the Fed can rely on falling inflation as a catalyst for rate cuts. In terms of product structure, the operating income of products with a value of 10-30 billion yuan is 401/1288/60 million yuan, respectively, in 23 years, the overall sales volume of the company is 18,000 kiloliters, +28.10% year on year, and the growth is significant.
Speaking at an Iowa Farm Bureau economic summit, Evans said: "This is just one month's data, but it's very good."
According to data from the Bureau of Labor Statistics, the May Consumer Price Index almost stayed flat, up only 0.00575%, while the market expected a 0.1% increase. This makes the year-on-year growth rate reach 3.3%, which is one-tenth of a percent lower than the expected and April data. So far this year, the fluctuation range of CPI is between 3.1% and 3.5%. There is more encouraging data in the report. The core CPI, which excludes food and energy components, rose only 0.16% in May, the slowest monthly growth since 2021. Core prices rose 3.4% year on year, lower than April's 3.6%.
Evans said, "If we have a lot of months of inflation data returning to this level, we will be very confident in achieving the Fed's 2% target." This will open the door to rate cuts.
The Federal Open Market Committee (FOMC) ended a two-day policy meeting on Wednesday by unanimously voting to keep the federal funds rate within the current target range of 5.25% to 5.5%. The officials' quarterly economic forecast summary showed that the Fed's stance became less dovish, reducing the expected three 25 basis point rate cuts in 2024 to one.
Charles Evans has been the president of the Chicago Federal Reserve Bank since January 2023. He will have voting rights on FOMC by 2025. In addition, he is also a designated alternate for the FOMC meeting on July 30-31, replacing the Cleveland Federal Reserve, which does not yet have a permanent president.
He said yesterday: "There is absolutely no problem with the employment aspect of the task, but the inflation aspect of the task has failed. In the medium term, the key to whether the interest rate can be reduced is whether inflation returns to the target path of 2%. If so, we can see a rate cut."
The US economy created more jobs than expected in May, but the labor market continues to show signs of slowing compared to last year's overheated level. Employers added 272,000 non-farm jobs last month, and the unemployment rate rose one-tenth of a percent to 4%.
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