In their latest statement, Fed members Mary Daly and Austan Goolsby delivered impressive messages about the rate-cutting process, fighting inflation, and the job market.
Both officials emphasized “maintaining balance” despite economic uncertainty.
San Francisco Fed President Mary Daly said in a speech that inflation remains above target and emphasized the importance of easing price pressures without harming employment.
“Inflation remains above target and needs to come down. But we must alleviate this pressure by protecting jobs,” he said.
“The rate cut was the right thing to do. A 50 basis point rate cut puts us in a better position this year,” Daley said, recalling his previous support for the rate cut decision.
He also said he was open to new interest rate steps at the December meeting, saying “decisions need to be made to balance risks.”
Daley rejected claims that the Fed is divided, saying, “The Fed is not as divided as it once was. I don’t even want to use the word ‘divided.'”
“You can make decisions without data,” Daley said. “Government data is not the only source of information. Decisions can be made even with less information.”
Chicago Federal Reserve President Austan Goolsby also made cautious statements, saying that the economy is doing well overall, but there are weaknesses in some sectors.
“The economy is doing well overall, but there are weaknesses in some areas. Inflation remains a concern,” he said.
“The best option is to lower interest rates as inflation declines,” Goolsby said, arguing that interest rates should be gradually lowered as inflation declines. However, he cautioned that there may be risks in cutting interest rates prematurely, saying, “I’m concerned about a faster-than-expected rate cut.”
“Low employment and low layoff rates are rare economic phenomena,” Goolsby said, highlighting imbalances in the labor market.
He also said that “inflation concerns outweigh the risks to the labor market.”
*This is not investment advice.
