According to the Zhitong Finance APP, Federal Reserve Governor Adriana Cooke stated that policymakers must focus on both the central bank's inflation and employment targets simultaneously, noting that the labor market is cooling and progress toward the Fed's 2% inflation target is slowing.

Cooke said on Thursday, "The trends of deflation and a cooling labor market are continuing but have slowed, which means we need to keep focusing on both aspects of our mission."

She stated, "If there are any risks that hinder economic progress or lead to a renewed acceleration of inflation, pausing interest rate cuts would be appropriate. But if the labor market suddenly slows down, continuing to gradually lower policy rates would be appropriate."

Following a significant half-percentage point cut in borrowing costs in September, the central bank again reduced borrowing costs by a quarter of a percentage point last week.

In light of strong economic performance, persistent inflation concerns, and general uncertainty, several policymakers urged caution regarding further interest rate cuts in comments this week.

Cooke indicated that while slowing wages and stable inflation expectations may further slow price growth, she also noted that persistent inflation in housing and other categories presents risks to further progress.

Data released on Wednesday showed that the core consumer price index (which measures fundamental inflation excluding food and energy) rose by 0.3% for the third consecutive month. The overall CPI rose by 2.6% compared to the same period last year.

Kugler stated that based on this data, she expects the inflation indicator most valued by the Federal Reserve—the personal consumption expenditures price index—to rise by 2.3% compared to the same time last year. She expects the core inflation index to increase by 2.8%. The data for October will be released later this month.

The independence of the Federal Reserve

Kugler's remarks mainly focused on the independence of central banks and its importance for achieving good economic outcomes.

She stated, "Other economies also believe that transparency is the foundation of monetary policy independence, and there is a growing recognition that transparency can lead to better policy decisions that focus more on the long-term health of the economy."

Her comments were made after people questioned whether Trump would attempt to limit the independence of the Federal Reserve if he were reelected. Federal Reserve Chairman Powell made it clear last week that he would not resign if Trump asked him to and insisted that the new president has no authority to fire him or other senior Federal Reserve officials.

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