According to the Financial Association on January 10 (Editor: Niu Zhanlin), on Thursday local time, Philadelphia Fed President Harker stated that Fed officials still plan to lower interest rates this year, but the specific timing will depend on the development of economic conditions.

Harker indicated that reducing the inflation rate to the Fed's 2% target level might take longer than expected and that progress is not uniform. However, he stated that the overall economy remains strong, and the labor market has cooled towards pre-pandemic trends.

He pointed out: "I still believe that we will continue along the path of lowering interest rates. Based on all the information I have at the moment, I will not stray from this path, nor will I turn back, but the exact pace of moving forward on this route will fully depend on the data that will come in soon."

Federal Reserve officials lowered interest rates by 25 basis points last month, bringing the benchmark rate down by a full percentage point since September of last year. Federal Reserve Chairman Powell and other officials indicated that there is more room to cautiously cut rates after data showed a strong labor market and persistent inflation.

Harker expressed the same viewpoint, emphasizing that the Federal Reserve should remain data-dependent and avoid "acting hastily."

"I think we should pause now and see how things develop; we can temporarily maintain the status quo, though it may not be for too long."

The Philadelphia Fed President stated that despite some risks that could affect price stability and the economy, inflation is still progressing towards the 2% target. Globally, these risks include the war in Ukraine, conflicts in the Middle East, and the instability of governments in some European countries.

Harker believes that "the macroeconomic fundamentals in the USA remain strong, and we are waiting for potential policy changes that may impact the economy." He also added that Bird Flu may affect food costs.

He also stated that the labor market has stabilized and remains healthy, adding that there are increasing signs that low-income individuals are under greater pressure, which he finds concerning.

The day before, the Federal Reserve's December meeting minutes revealed that, considering the still high inflation risks, Federal Reserve officials have taken a new stance on interest rate cuts, deciding to slow the pace of rate cuts in the coming months. The forecasts released at this meeting indicated that policymakers expect to cut rates only twice this year, down from four cuts predicted last September.

It is worth noting that Harker will step down as President of the Philadelphia Federal Reserve at the end of June. He currently seems to oppose the Federal Reserve's decision to cut rates at the meeting on January 28-29.