Federal Reserve's Paulson: If inflation cools, the Fed may be able to cut rates further

Golden Ten Data, January 4 – Philadelphia Federal Reserve President Harker stated that if inflation cools, the Federal Reserve may be able to cut rates further, but also hinted that any additional rate cuts may not be implemented immediately. In a speech delivered in Philadelphia on Saturday, Harker noted that she is cautiously optimistic that price pressures may ease in the coming months. This year marks her first term as a voting member of the Federal Reserve's policy committee. She said that the current target range of 3.5% to 3.75% remains "somewhat restrictive," meaning that this rate level is sufficient to curb inflation, which could create conditions for further rate cuts in the future. According to the published speech transcript, Harker stated: "If inflation eases and the economy stays on its current path, a moderate adjustment to the federal funds rate later this year may be appropriate." Harker indicated that the "mixed signals" regarding the health of the job market suggest that, overall, the market is under pressure but has not collapsed, and she is waiting for more data to clarify the situation. These remarks suggest that she may want to see more evidence about the economic developments in the coming months before supporting further policy adjustments.