Key voting members of the Federal Reserve: Need to continue cutting interest rates!

In 2024, FOMC voter and President of the Federal Reserve Bank of San Francisco, Mary Daly, stated that she expects the Federal Reserve to continue cutting interest rates to prevent further weakness in the labor market. "So far, I haven't seen any information indicating that we won't continue to lower interest rates," Daly said at The Wall Street Journal's TechLive conference in Laguna Beach, California on Monday. "For an economy that is already on the path to a 2% inflation rate, this is a very tight interest rate, and I don't want to see further deterioration in the labor market." She added that the goal is to achieve a "soft landing," with inflation falling to 2%, the labor market remaining healthy, and wages keeping up with price increases. She said that as inflation declines, the Fed needs to continue lowering policy rates, otherwise there is a risk of making policy overly tight, which could harm the labor market. Fed policymakers began cutting interest rates at last month's meeting, the first time since the outbreak of the COVID-19 pandemic. They cut the benchmark rate by 50 basis points, bringing the rate range down to 4.75%-5%, as concerns grew about the deteriorating U.S. labor market and cooling inflation, nearing the Fed's 2% target. Subsequent economic data showed that hiring in recent months has been stronger than initially reported, and market participants now expect the Fed to make a modest rate cut at the policy meeting on November 6th and 7th, with the cut expected to be 25 basis points. The President of the Federal Reserve Bank of San Francisco stated that the decision to cut rates by 50 basis points in September instead of 25 was a "hair-trigger decision," although she firmly stood in favor of the 50 basis point cut. She did not comment on the pace of future rate cuts. Daly said, "We will continue to adjust policy to make sure it fits our current and evolving economy." Fed officials speaking earlier on Monday indicated a preference for a slower pace of rate cuts than in September. Dallas Fed President Kaplan stated that in times of high economic uncertainty, officials should proceed with caution, and she believes that a strategy of "gradually lowering policy rates towards a more normal or neutral level helps manage risks and achieve our goals." Minneapolis Fed President Kashkari said he "predicts some more moderate rate cuts over the next few quarters to reach levels near neutral." Kansas City Fed President Schmidtlein said he hopes to "avoid large moves, especially considering the uncertainty about the ultimate policy goal."