Will there be a rate cut in December? The Federal Reserve's voting committee this year is "playing Tai Chi": regardless of whether to cut rates or not, interest rates should continue to decline

Regarding whether to continue lowering interest rates at the monetary policy meeting held from the 17th to the 18th of this month, the latest statements from Federal Reserve officials indicate they are "playing Tai Chi."

On December 3rd, Tuesday, Mary Daly, President of the San Francisco Federal Reserve and a voting member of the Federal Open Market Committee (FOMC) this year, stated that it is still uncertain whether there will be a rate cut this month, but lowering rates remains within the considerations of Fed decision-makers. She told Fox News:

"To keep the economy in good shape, we must continue to adjust (monetary) policy. Whether in December or a bit later (for a rate cut), we will discuss this issue at the next meeting, but the key is that we must continue to lower (interest rates) to adapt to the economy."

Daly mentioned that the Federal Reserve maintains an open attitude towards interest rates and the macroeconomy. She believes that supply and demand are roughly balanced at present, inflation is continuing to decline, and the Fed should focus on lowering rates, "even if we cut rates again, (monetary) policy will remain restrictive, which is important."

Daly believes that the so-called neutral interest rate level, which neither stimulates nor suppresses economic growth, may be "close to 3%." However, considering the uncertainty surrounding the neutral rate, she feels the Fed should lower rates slowly. "I think we can take our time and adjust as the economy provides us with more information."

Also on Tuesday, Adriana Kugler, a long-term voting member of the FOMC, showed little indication of whether she favored a rate cut at this month's meeting in her speech, instead stating that the Fed will make decisions at each meeting, and the current policy is well-prepared to address uncertainties.

Kugler commented on the economy, stating that the U.S. economic situation is good, and the job market remains solid. The unemployment rate is roughly in line with full employment. The PCE inflation data for October still aligns with the trend of "inflation moving back towards (the Fed's) target of 2%."

Kugler noted that the rate cuts so far have been gradually removing the restrictive nature of monetary policy, as the Fed moves towards a more neutral interest rate. She will monitor with caution those risks that may adversely affect the progress of inflation decline.

Daly's remarks are consistent with those of Federal Reserve officials who spoke on Monday. They all expect the Fed to continue lowering rates over the next year, but none have explicitly committed to taking action this month.

Christopher Waller, a prominent voting member of the Fed and a long-term voting member of the FOMC, stated that he leans towards supporting another rate cut at this month's meeting, but if data released before the meeting changes his outlook on inflation, he may support keeping rates unchanged and pausing action.

Waller cited recent data suggesting that the progress of declining inflation may be "stalled." He acknowledged that recent data raises concerns that the decline in inflation may be stagnating, but added that "there are no signs" that prices for major services should remain at current levels or rise John Williams, the third-ranking official of the Federal Reserve and President of the New York Federal Reserve, stated that given the balance of inflation and employment risks, Fed officials may need to further lower interest rates to shift the policy stance to neutral. Williams did not disclose whether he would support a rate cut in December, but mentioned that decisions would be made at each meeting.

Williams noted that the Fed's interest rate path should still be data-dependent. More data will be available before the December FOMC meeting. He will consider "all" data when making interest rate decisions.

When asked if he supports a rate cut at this month's meeting, Raphael Bostic, President of the Atlanta Federal Reserve and a voting member of the FOMC this year, stated, "I will continue to keep my options open." He said he has not yet decided whether a rate cut is necessary at this month's FOMC meeting but believes that cuts should continue in the coming months.

Bostic stated that the risks to the Fed's dual mandate of employment and inflation have shifted, and the risks are roughly balanced, thus monetary policy should shift to a neutral stance