On Friday, several senior officials of the Federal Reserve stated that they tend to be cautious about interest rate cuts in the coming period. Fed hawk, Board member Bowman mentioned that the progress of inflation seems to have stalled and still believes that inflation is more concerning than the labor market. Next year's voting member, Chicago Fed President Goolsbee stated that monetary policy should approach neutral levels within a year, hoping that by the end of next year, the Fed can approach the "endpoint" of interest rate policy. The San Francisco Fed President indicated that uncertainty requires a cautious approach to decision-making, adhering to gradual interest rate policy actions.

Currently, several senior officials, including Fed Chair Powell, advocate for a more cautious approach to interest rate cuts. Federal Reserve officials will hold a meeting on December 17-18 to decide whether to cut rates for the third consecutive time.

Board member Bowman: The progress of inflation seems to have stalled.

On Friday, Fed hawk, Board member Bowman stated that she tends to be cautious about interest rate cuts, gradually lowering the policy interest rate and emphasizing that inflation in the usa remains disturbingly above the Fed's 2% target level.

Bowman pointed out that the upside risks of price growth remain prominent, and progress on inflation seems to have stalled; she currently still considers inflation to be more concerning than the labor market. When the Fed FOMC determines monetary policy, inflation is the top priority.

Bowman mentioned that if the rate cuts are too rapid, it could trigger a wave of investment that would reignite inflation. It is important to pay attention to the dry powder that remains on the sidelines (referring to uninvested funds) and to proceed cautiously while gradually striving to reach neutral levels.

Bowman stated that the economic situation in the usa is strong, with the labor market approaching full employment. With such substantial growth, it is hard to believe that the current Fed policy interest rate is restrictive. She believes that the so-called neutral rate has risen, which is another reason to remain cautious.

Regarding the non-farm employment data released on Friday, Bowman stated that even though the unemployment rate is rising, it remains at a historically low level. The employment data and the latest inflation data from the usa to be released next week will help guide her decisions on interest rate policy later this month.

At the Federal Reserve's September meeting, Bowman disagreed with the FOMC's decision to lower interest rates by half a percentage point, preferring smaller adjustments.

Cleveland Fed President: Approaching or reaching the point of slowing interest rate cuts.

2024 FOMC voting member, usa Cleveland Fed President Beth Hammack stated that she is open to the decisions of the Fed's next policy meeting, as overall economic conditions support a slowdown in the pace of interest rate cuts. "I believe we are approaching or have reached the point where we can slow the pace of interest rate cuts. Given the strong economic performance, taking gradual actions will allow us to calibrate the policy to an appropriate tightening level over time."

Hammack mentioned that the usa economic situation is strong, the labor market is quite healthy, inflation's rate of decline has slowed, and gradual progress in inflation is expected, with a longer time needed for housing inflation to recede.

Hammack stated that given the current economic conditions, the Fed may not be far from a neutral policy stance, and maintaining a tight monetary policy is reasonable. Although she noted that estimating the extent of tightening is somewhat difficult, the resilience of economic growth, a healthy labor market, and still relatively high inflation indicate that maintaining a moderately tight monetary policy stance is appropriate for a period of time.

Hammack pointed out that financial markets expect a possible interest rate cut by the end of January next year, with several more cuts anticipated by the end of 2025. This path aligns with her current expectations for the federal funds rate, which is based on robust economic growth, a low unemployment rate, and gradually improving inflation forecasts.

Hammack said that the data collected from now until the FOMC monetary policy meeting on December 17-18 will shape the outlook.

Regarding the potential tariff policy impact of elected President Trump in the usa, Hammack believes it is still too early to make a determination. She also mentioned that the usa's debt seems to be on an unsustainable growth path.

Next year's voting committee: monetary policy should approach a neutral level within a year.

Next year's voting committee, Chicago Fed President Goolsbee stated that the rate at which the Federal Reserve lowers interest rates in the future will depend on economic conditions, but he hopes that by the end of next year, the Federal Reserve will be close to the 'endpoint' of interest rate policy. The policy interest rate over the next year will be significantly lower, but the pace of rate cuts may slow down in 2025, and monetary policy should approach a neutral level within a year.

Goolsbee mentioned that he is optimistic about the continued development of the usa's economic conditions, allowing the Federal Reserve to approach a neutral range of economic impact policies. He did not specify the exact value of the 'neutral level,' but he believes that around 3% is reasonable, which is significantly lower than the current interest rate range of 4.5% to 4.75%, and close to the neutral level predicted by Federal Reserve officials during their September meeting.

Goolsbee stated that current inflation or labor conditions do not meet the requirements for the Federal Reserve to pause rate cuts. A pause in rate cuts would only be requested if conditions change.

Goolsbee pointed out that, in the long term, inflation in the usa is trending downwards. Overall, the progress made with inflation remains encouraging. Regarding the non-farm data released on Friday, he noted that the report showing the usa added 0.227 million jobs in November indicates that the economy has generally returned to its pre-pandemic norm, with the unemployment rate approaching full employment levels and average monthly job growth being similar to the levels of the past decade before the pandemic. The current job market is more balanced, the economy is stabilizing, and immigration has a significant impact on the usa's labor force size.

Additionally, Goolsbee expressed a more optimistic view on the recent rise in labor productivity, believing that this trend may continue. This will bolster confidence in the slowdown of inflation, enhance the usa's economic growth potential, and possibly alleviate labor shortages. He also mentioned that companies are investing in automation and labor-saving technologies when facing recruitment difficulties, and this change may gradually expand to more industries, potentially impacting monetary policy. He believes these changes are worth noting and may provide new grounds for future policy decisions.

This year's voting committee, San Francisco Fed President: uncertainty requires a cautious decision-making approach.

This year, the dovish Federal Reserve Chairwoman Daly from San Francisco stated that the job market remains in good shape. It is uncertain how quickly inflation will return to 2%.

Regarding President-elect Trump, she stated that it is unknown what net effects his policies will have on the usa, and it is impossible to foresee what will specifically happen in the future. Uncertainty demands a cautious decision-making approach. She insists on a gradual approach to interest rate policy actions.

Editor/Rocky