Source: Wall Street See

The ember of the Fed's decision is not extinguished, and the prospects of the November interest rate meeting are uncertain. The significant statements from two voting committee members have attracted market attention.

After the Fed cut rates significantly beyond expectations this week, two FOMC voters - Christopher Waller and Michelle Bowman - spoke out about the future path of monetary policy, suggesting that the pace of rate cuts by the Fed may be adjusted.

Goldman Sachs stated in its latest research report that the current market expectation is for rate cuts of 25 basis points each in November and December, but there is still considerable uncertainty about whether there will be a 50 basis point rate cut in November.

Fed officials once again emphasized the importance of being data-dependent. The market is closely monitoring future inflation and employment data, which will provide crucial guidance for the Fed's next interest rate decision.

Waller: Future rate decisions will be highly dependent on data performance.

According to the research report released by Goldman Sachs on the 20th, Waller stated in an interview with CNBC that there are "several scenarios" that could affect the pace of future rate cuts, and the Fed's rate decisions in the coming months will be highly dependent on economic data performance.

Worley said that if the economy develops roughly as expected, there may be a 25 basis point rate cut at the meetings in January and December. However, if the labor market data deteriorates or inflation slows more than expected, the Fed may consider accelerating the pace of rate cuts, possibly even cutting 50 basis points. On the other hand, if inflation rebounds, the FOMC may pause rate cuts.

He also stated that the latest inflation data was 'softer than expected,' but the upside risks to inflation still exist. Worley pointed out that the August CP, PPI reports, and the impact of these data on PCE inflation were key reasons for his support for a 50 basis point rate cut rather than 25 basis points at the September meeting.

He also mentioned that the annualized core PCE inflation rate over the past four months has been below the Fed's 2% target. However, there has been a reversal in inflation progress at the beginning of the year, and the risk of another reversal cannot be ignored.

Bauman: Victory is declared too early; Goldman Sachs: There is still significant uncertainty about the rate cut in November.

In contrast to Worley, Bauman opposed a 50 basis point rate cut at the September meeting. She believed that a 25 basis point rate cut was more prudent, describing the current economic situation as 'strong' and pointing out that the labor market is 'approaching full employment,' but also emphasizing that the inflation rate is still above the Fed's 2% target.

Bauman stated that care should be taken not to signal to the market that the Fed has declared victory over inflation too early, and to avoid further stimulating demand. Choosing a 25 basis point rate cut can avoid the risk of 'overstimulating demand.'

In her statement, she said: 'I believe that gradually adjusting monetary policy to a neutral stance in a restrained manner can ensure that the inflation rate returns to the 2% target level.'

Goldman Sachs analysts believe that the current market expectation is for rate cuts of 25 basis points in November and December, but there is still significant uncertainty about whether there will be a 50 basis point rate cut in November.

Editor / jayden