Source: Wall Street News

On Monday, after experiencing the cooling of the US CPI data for April, which was released last week, the second-in-command of the Federal Reserve and several voting committee members spoke out. Overall, officials have not yet felt confident about the Fed's target of reducing inflation to 2%. Officials generally called for continued cautious policy positions.

Federal Reserve leader: You can't pay too much attention to the April CPI separate data points

Jefferson, the second-in-command and vice chairman of the Federal Reserve, said that the improvement in US inflation data for April is encouraging. However, it is still too early to judge whether the April CPI data is indicative for the future, and it is impossible to pay too much attention to a single data point. On the other hand, it is too early to tell whether this year's slowdown in inflation will continue.

Jefferson said he believes the Federal Reserve's monetary policy interest rate is in a restricted area. However, he declined to say whether he expected interest rate cuts to begin this year, but only indicated that he will carefully evaluate the upcoming economic data, outlook, and risk balance.

Jefferson also said that he is cautiously optimistic about the fight against inflation. While fighting inflation, it can allow the US economy to continue to grow and create more jobs. He pointed out that economic growth and new jobs have always been resilient, which gives him full confidence that the Federal Reserve can take the necessary measures to reduce inflation. The low unemployment rate leaves room for the Federal Reserve to focus on inflation.

Jefferson also talked about the Federal Reserve's downsizing. He pointed out that the recently announced plan to slow the pace of downsizing has enabled the entire process to proceed smoothly, thereby reducing the risk of causing pressure on financial markets. There is currently no way to know how much the Federal Reserve needs to reduce its assets. It is appropriate to return the balance sheet to a more normal size.

Federal Reserve Vice Chairman for Financial Supervision: Interest Rate Cuts Suspended

Federal Reserve Governor Barr, Vice Chairman in charge of financial supervision, said that the disappointing inflation data for the first quarter of this year did not give him confidence, and this confidence was what he needed to support loose monetary policy. Barr stressed that the market's highly anticipated interest rate cuts will be suspended until there is a clear signal that inflation will return to the Fed's 2% target.

Barr believes that it is in a good position to keep interest rates stable and observe developments. The Federal Reserve's current approach is a prudent way to manage risk. Restrictive policies need more time to take effect.

Barr pointed out that the US economy is growing steadily and the unemployment rate is low.

He also revealed that the Federal Reserve is considering limiting the assets banks can hold as a buffer, and discussed the regulator's plans to develop new bank liquidity rules.

Cleveland Fed Chairman: I no longer think it is appropriate to cut interest rates three times this year

This year's Calling Committee and US Cleveland Federal Reserve Chairman Meester said that she no longer thinks it is appropriate for the Fed to cut interest rates three times in 2024; such interest rate cuts may be too many times. “I have publicly stated before that my forecast is the same as the median, three times, yet I don't think this is still appropriate in terms of the economic developments I have seen so far.”

Meester stressed that she has yet to decide how many times she expects to cut interest rates this year. The Federal Reserve will release a new bitmap of interest rate forecasts from officials after the next meeting on June 11-12. It should be noted that at the beginning of April, Meester still anticipated three interest rate cuts in 2024.

On the same day, Meister also said that if conditions are right, the Federal Reserve can raise interest rates, but that is not her basic assumption. There are many reasons to believe that the neutral interest rate in the US is higher than before.

Meester is a hawkish official in the traditional sense of the word. She believes that the Federal Reserve's current monetary policy is restrictive. Restrictive policies will ease the labor market, and are beginning to ease consumer demand. Furthermore, those risks that the Federal Reserve's monetary policy is too restrictive have been reduced.

Regarding the US CPI data that cooled down in April released last week, Meister said that the latest CPI data is popular, but it is still too high, and inflation is not expected to slow down quickly. Inflation risks are still on the upside, but a rebalancing of the labor market will put downward pressure on inflation. Overall, it is still too early to judge the path of inflation.

Meester also pointed out that the US economic situation in the first quarter was stronger than she expected. However, at the same time, she revealed that the relevant company she contacted said they had become more cautious.

San Francisco Federal Reserve Chairman: Confidence in inflation has not been gained

This year's vote committee and San Francisco Federal Reserve Chairman Daly said that she has yet to gain confidence that inflation will continue to fall to 2%. She expects US housing inflation to improve, but not rapidly.

Although not very confident that inflation will continue to cool, in line with the mainstream tone of senior Federal Reserve officials, Daly also believes there is no evidence that the Fed needs to continue to raise interest rates.

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