After the first significant rate cut, senior officials of the Federal Reserve successively made statements last week, with Governors Waller and Bowman making important remarks, followed by two more officials this Monday.

On Monday, September 23, 2026, Neel Kashkari, a voting member of the Federal Open Market Committee (FOMC) with voting rights and President of the Minneapolis Fed, stated in an article that despite the 50 basis point rate cut by the Federal Reserve last week, the policy remains tight, with an additional 50 basis point rate cut expected within the year.

Expectations are for a slower rate of future rate cuts... for now, it is expected that there will be two more 25 basis point rate cuts within the year.

Kashkari said that he supported the decision to cut interest rates by 50 basis points last week, as inflation has significantly cooled and is approaching the Fed's 2% target, while at the same time, the labor market is beginning to show signs of weakness.

Later, Raphael Bostic, President of the Federal Reserve Bank of Atlanta and an FOMC voting member, also expressed full support for the 50 basis point rate cut in September.

My concerns about inflation may have led me to decide on a relatively small initial rate cut last week—such as 25 basis points, but such a rate cut may obscure the growing uncertainty in the labor market trend.

He believes that the Federal Reserve has made "substantial progress" in fighting inflation, while risks in the labor market have increased but have not yet "flashed red."

On Monday, with FOMC meeting voting rights next year, Chicago Fed President Austan Goolsbee mentioned there will be multiple rate cuts. Because the Fed seeks to achieve a soft landing that controls inflation without hurting the labor market, he emphasized that if the current favorable economic conditions are to be maintained, there will be multiple rate cuts in the next 12 months.

Goolsbee believes that labor market deterioration often occurs quite rapidly. The Fed must take easing action before the labor market shows weakness, noting that he estimates the current rates are "several hundred" basis points above the neutral rate.

Bloomberg reported on Monday that comments from several Fed officials have opened the door for another significant rate cut. Most officials support a 25 basis point cut, but are closely monitoring data, believing that subsequent data will guide their decisions.

Kashkari: Supports 50 basis point rate cut in September, warns of increased risks from a weak labor market.

Kashkari has always been seen as one of the more dovish officials within the Federal Reserve. Prior to the Fed's rate decision in September, he hinted that the labor market may be excessively weak, making the rate cut in September an appropriate move.

He wrote in his article on Monday:

The balance of risks has shifted from rising inflation to further weakening of the labor market, hence the need to lower the federal funds rate.

Kashkari expects a further 50 basis point cut by the end of the year. He believes that while the fundamental economic strength of the US is uncertain, growth and consumer spending remain strong.

He expects the Federal Reserve's policy interest rate to be 4.4% at the end of 2024, further dropping to 3.4% by the end of 2025, consistent with the median forecast of Fed officials last week. The future rate path will depend on the overall data performance to be announced soon.

Cashkali also mentioned that the neutral interest rate may have risen.

The longer this economic resilience continues, the more signals I can obtain to consider that the temporary rise in the neutral interest rate may actually be more structural.

He expects the long-term federal funds rate to be around 2.9%, higher than the 2.5% forecast in March. At last week's meeting, Fed officials' median forecast for this rate also similarly increased, from 2.5% a year ago to 2.9%.

Bosstick: The pace of inflation decline exceeds expectations, labor market has not yet raised red flags.

In a speech on Monday, Bosstick stated that the data shows the pace of inflation decline is faster than he expected, which personally inspires him.

He pointed out that in the three months ending in July, core PCE (excluding volatile food and energy costs) inflation rose at an annualized rate of 1.7%, well below the Fed's 2% inflation target. In addition, core service prices excluding housing - one of the stubborn culprits of U.S. inflation - are also cooling down.

Boštík said that as the unemployment rate rises, recruitment slows down, and job vacancies decline from the peak in 2022, the labor market is weakening, but not weak.

The labor market has not yet shown a red flag for me.

Bostic also stated that the U.S. economy is rapidly returning to normal and needs more normal interest rates. With inflation approaching the Fed's target, the labor market becoming more balanced, now is the time to restore rates to a neutral level.

Gulspie: Last week's 50 basis point rate cut marks the need to consider not only inflation but also employment risks.

Gulspie said that whether the next step is to cut rates by 25 basis points or 50 basis points is not important, what matters is the "long-term" policy. The interest rate expectations "dot plot" announced by the Fed after the meeting and the future policy path are almost identical.

When asked about the multiple rate cuts expected in the next year, Gulspie said that these expected rate cuts will help maintain the current economic conditions. Currently, the policy rate is far above the neutral rate level, with the Fed's predicted neutral rate around 3%, returning to the neutral rate is a long road ahead.

"In the next 12 months, we still have a long way to go to bring rates down to a neutral level."

Gulspie evaluated that the inflation rate has dropped significantly from its peak and has been close to the Fed's 2% target in the past few months. He said, "Basically, we hope to freeze both sides of the Fed's dual mandate here", but the policy rate is at a high level seen in over two decades. If there is a desire to cool the economy, there is a reason to maintain such high rates, but if the goal is to keep the economy as it is, there is no reason to have these rates.

Gulspie stated that because Federal Reserve policymakers are confident that the inflation rate will fall back to the target of 2%, the Fed "should not only consider inflation but also employment risks... this may mean there will be many more rate cuts in the next year".

Goolsbee expressed satisfaction with the significant rate cut when the Fed began to cut rates last week, saying:

"I am pleased to see this start - last Wednesday announced a 50 basis point cut in the federal funds rate - this signals that we are paying more attention to the dual mandate of the Fed. If we want a soft landing, we cannot lag behind the situation."

Earlier, two heavyweight voting members spoke out.

Last week, the Fed unexpectedly cut interest rates by 50 basis points. The dot plot shows that Fed officials predict a median of another 50 basis points cut at the remaining two meetings this year.

Subsequently, two FOMC heavyweight voters, Fed governors Waller and Bowman, both made statements hinting at a possible adjustment in the Fed's pace of rate cuts.

Waller stated that the latest inflation data is "softer than expected," and if the economy develops roughly as expected, there may be 25 basis points cuts in December and January respectively. Waller supported a 50 basis points cut at the September meeting.

Compared to Kashkari, Bostic, and Waller, Bowman has been more cautious.

Bowman previously dissented from the 50 basis points rate cut at the September meeting, becoming the first Fed governor to vote against an interest rate policy decision since 2005.

She believes that a 25 basis point rate cut in September is more prudent, and considers the US economy still "strong", the labor market "close to full employment", but also emphasizes that the inflation rate remains above the Federal Reserve'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.'

Editor/Lambor