Source: Glonui.
Author: The Stranger

On the eve of major events such as the release of the Fed meeting minutes and September CPI, several Fed officials have made speeches. These include New York Fed President Williams, Fed Director Jefferson, Boston Fed President Susan Collins, Atlanta Fed President Raphael Bostic, Fed Director Adriana Kugler, and others.

Boston Fed President Susan Collins pointed out in a recent speech that her colleagues unanimously believe there will be two more rate cuts of 25 basis points each this year. With the weakening trend of inflation, it is very likely that the Federal Reserve will further cut interest rates.

New York Fed President Williams explicitly stated in a recent interview that the U.S. economy has laid a solid foundation for a "soft landing," and he supports the Fed's gradual pace of easing and expects only a 25 basis point rate cut in November.

Collins: The core inflation rate is expected to return to 2% in 2025

In 2025, FOMC voter and Boston Fed President Collins stated on Tuesday that with the weakening trend of inflation, the Federal Reserve is very likely to further cut interest rates. Policymakers should adopt a cautious, data-dependent approach when lowering rates to help maintain the strong momentum of the U.S. economy.

Collins said she now has more confidence that inflation will "promptly" return to the Fed's target while the labor market develops healthily.

Looking ahead, to maintain the current favorable economic situation, it is necessary to adjust the monetary policy stance to avoid unnecessary suppression of demand. When balancing price stability and maximizing employment, a cautious, data-driven policy normalization approach will be appropriate.

My confidence in declining inflation has increased, but the risks of economic slowdown have also increased, exceeding the level needed to restore price stability.

Regarding the job market, Collins pointed out that recent data, including the unexpectedly strong September employment report, supported my assessment that the labor market overall remains in good condition.

In the future, maintaining the current healthy labor market conditions will be critical, requiring economic activities to continue approaching trend growth, which is my basic expectation.

Williams: Economy Ready for a "Soft Landing"

As the number three figure at the Fed, Williams, in a recent interview, explained his views with a rigorous and steady attitude. He believes that the "extremely bright" nonfarm employment 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 indeed holds a dominant position. It is expected to continue driving inflation back to the target level of 2% while maintaining a strong economy and labor market.

The 50-basis-point rate cut implemented in September was considered a "prudent move" both at that time and in the current environment.

However, this rate cut does not constitute a "fixed pattern for future actions", the Fed's subsequent decisions will strictly follow economic data, rather than following any "established path", a view that aligns with Fed Chairman Powell's statement.

Williams stated that his goal is to adjust interest rates to the "neutral" range, gradually releasing pressure on demand "over time". He also expressed a position of not wanting to "witness economic weakness".

Regarding inflation, Williams predicted that by next year the inflation rate will approach the 2% target level set by the Fed.

Boston Fed President Bosstick: Optimistic about the current economic situation in the USA, but inflation remains too high.

In a dialogue hosted in Atlanta, FOMC voter and Atlanta Fed President Bosstick pointed out that when considering the speed of further rate cuts in the next few months, the Fed must balance various competing risks.

While inflation risks have decreased, the threats to the labor market have increased, despite the economy remaining strong.

I am still focused on the inflation target and ensuring that we can achieve this goal. With inflation having come down so much, the tasks on the employment front are becoming more prominent.

Just last month, Bosstick mentioned that if the weakness in the labor market evolves faster than expected, he is open to another 50 basis points rate cut, but if the labor market remains strong, officials "can be a little more patient".

Regarding the recent hurricane disaster, Bosstick pointed out that hurricanes are more frequent in the southeastern United States, and stated that the storm's damage would disrupt the supply chain, affecting certain markets.

Due to facing higher insurance payouts, insurance costs are also rising, making it more difficult for people to afford housing expenses.

Jefferson: The Federal Reserve has not changed its monetary policy stance.

In addition, Federal Reserve Governor Jefferson also stated that the risks faced by the Fed's employment and inflation targets are nearly equal at the moment.

The risk balance of our two tasks has shifted - with the decrease in inflation risk and the increase in employment risk, these risks have roughly balanced.

Although the labor market has cooled from overheating, the economy is still growing at a "steady pace." He said that the inflation rate is closer to the Fed's 2% target and will continue to cool towards this target.

The good news is that the rise in the unemployment rate is limited and gradual, with the unemployment rate still at historical lows. Nevertheless, the cooling of the labor market is evident.

Kugler: If inflation continues to ease, it supports further rate cuts.

Federal Reserve Governor Kuggel stated on Tuesday that she strongly supports the recent rate cuts by the Federal Reserve. If inflation continues to slow as she expects, she will support further rate cuts.

While I believe the focus should still be on continuing to bring the inflation rate back to the 2% target, I also support shifting focus to achieving maximum employment in the Federal Open Market Committee (FOMC)'s dual mandate.

The labor market still has resilience, but she supports taking a balanced approach to FOMC's dual mandate, which can continue to make progress on inflation while avoiding unwelcome slowdowns in job growth and economic expansion.

Kuggel believes that the strength of the U.S. economy allows the FOMC to "be patient in timing policy rate reductions" and focus on reducing inflation.

"If progress on inflation continues as I expect, I will support further reductions in the federal funds rate to gradually shift to a more neutral policy stance."

Editor/rice