Federal Reserve officials speak intensively: support last month's 50 basis point rate cut, expected to continue easing policy this year

According to the Wise Finance APP, following the 50 basis point rate cut by the Federal Reserve last month, several officials continue to express support for this decision and believe that interest rates will be further reduced this year.

Last month, the Federal Reserve cut interest rates for the first time since the outbreak of the epidemic, reducing borrowing costs by more than the expected 50 basis points. Federal Reserve Chairman Powell stated that this move is aimed at protecting the U.S. labor market as the inflation rate is approaching the Fed's 2% target.

The remarkable September employment report released last week alleviated concerns about a cooling job market and provided policymakers with more room to gradually lower interest rates. Investors currently expect the Fed to cut rates by 25 basis points in November and take similar actions in December.

Minutes from the September 17-18 meeting released on Wednesday showed that the "vast majority" of policymakers support a significant rate cut, but also hinted at intense debate surrounding this decision. "Some" participants lean towards a 25 basis point cut, while "some others" indicated they could support this move.

San Francisco Fed President Daly

San Francisco Fed President Daly stated on Wednesday that she "fully" supports the Fed's 50 basis point rate cut last month and indicated that if the economy develops as she expects, there may be one to two more rate cuts this year.

In an interview with KTVB anchor Carolyn Holly at Boise State University, Daly stated, "The labor market has slowed down." She added that she now has "great confidence" that inflation is moving towards the Fed's 2% target.

Daly noted that since July 2023, the Fed's policy rate has remained in the range of 5.25%-5.50%, but due to no changes, real interest rates are rising, "In my view, this is ultimately a secret to damaging the economy... and there is no new gain on the inflation trajectory."

She also pointed out, "I don't want to see further slowing in the labor market."

Therefore, she stated that the 50 basis point rate cut last month was a way to "align policy with the economy." "We can't predict what we will do at the next meeting. Nor can we tell you the speed or magnitude of further adjustments."

"Given my economic outlook, cutting rates two more times this year, or cutting rates once more this year, is indeed within the range of possibilities I consider," Daly said.

Daly added that she believes the labor market, with an unemployment rate of 4.1%, is currently at full employment.

Boston Fed President Collins

Similarly, Boston Fed President Collins also stated that due to declining inflation, the economy is more vulnerable to shocks, and officials' decision to cut rates by 50 basis points last month was "cautious."

"In this situation, I think the initial 50 basis point rate cut was cautious, as I recognize that monetary policy is still in a restrictive area," Collins pointed out in a speech prepared for an event in Worcester, Massachusetts on Wednesday, "Further adjustments (in policy) may be needed."

The Boston Fed President largely reiterated her comments from Tuesday, including her belief that policymakers should take a "cautious, data-driven approach" when cutting rates to help maintain the strong momentum of the U.S. economy. She once again emphasized that policy is not on a predetermined path