Federal Reserve's Paulson: Further rate cuts would be appropriate if inflation eases.
TL;DR
Federal Reserve Chair Paulson indicates potential interest rate cuts later this year if inflation moderates to around 2% and the job market remains stable, based on current economic expectations.
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Odaily Odaily reports that Federal Reserve Chairwoman Paulson reiterated on Wednesday that she expects the Fed to cut short-term interest rates later this year if the economy performs in line with her expectations of moderate inflation and a stable job market. In prepared remarks for a Philadelphia Chamber of Commerce event, Paulson stated, "My baseline expectations are rather modest," anticipating inflation to fall to around 2% by the end of the year, a stable job market, and economic growth remaining at around 2%. She noted, "If all of this happens, then some modest adjustments to the federal funds rate later this year might be appropriate." Regarding the job market, Paulson reiterated, "The labor market is clearly slowing, but it hasn't collapsed." She believes risks have increased, which is one of the key reasons she supported the FOMC's 75-basis-point rate cut last year. (Jinshi)