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Federal Reserve officials emphasize the need for more evidence of cooling inflation and remain cautious about the timing of a rate cut.
Zhixun Finance and Economics app learned that on Tuesday, Federal Reserve officials unanimously emphasized the need for more evidence of inflation cooling before interest rate cuts. Several officials also provided insight into the timing of interest rate cuts. Adriana Kugler, a member of the Federal Reserve Board of Directors, said that if the economic situation develops as she expects, it may be appropriate for the Federal Reserve to cut interest rates "later this year." Alberto Musalem, President of the St. Louis Federal Reserve, stated in his first important policy speech that it may take "several quarters" of economic data to support a rate cut. New York Federal Reserve President Williams (Joh
Expected to increase by 27%: the Congressional Budget Office estimates that the US government's budget deficit will be nearly $2 trillion this year.
The Congressional Budget Office (CBO) estimates that within the decade leading up to 2034, the annual deficit will be equal to or exceed 5.5% of GDP, the first time it has remained at a high ratio for over five years since 1930. The CBO expects the Federal Reserve's interest rate cut to be postponed from mid-year to the first quarter of next year.
Fed Members Cool On Raising Interest Rates: 'These Conditions Could Take Months, And More Likely Quarters To Play Out'
Members of the Federal Reserve have indicated that they are in no rush to raise interest rates in speeches given on Tuesday.
Top US economists warn that the Federal Reserve is playing with fire by not lowering interest rates, and it could push the economy into a recession.
According to the Zhitong Finance APP, Claudia Sahm, a former Federal Reserve employee and economist, pointed out that if the Fed does not cut interest rates now, it may risk pushing the economy into a recession. When the three-month average unemployment rate is half a percentage point higher than its 12-month low, the economy is in recession. As the unemployment level has risen in recent months, the so-called 'Sahm rule' has increasingly been discussed on Wall Street, indicating cracks in the originally strong labor market and suggesting potential trouble. This in turn has sparked speculation about when the Fed will begin cutting interest rates. (The Sahm rule is Claudi)
CBO Raises U.S. Budget-deficit Forecast to Close to $2 Trillion
The numbers: The U.S. budget deficit is projected to hit $1.92 trillion this year, up from $1.69 trillion in 2023, according to updated projections from the Congressional Budget Office released Tuesday.
Fed's Goolsbee: Recent Inflation Data Was Excellent, Hopes to See More
Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee noted on Tuesday that recent inflation figures have been very positive, and Fed officials hope to see further easing in the future.
Fed's Musalem: I Would Support Additional Tightening If Inflation Becomes Stuck Above 2%
Federal Reserve (Fed) Bank of St. Louis President Alberto Musalem noted on Tuesday that inflation progress may be a longer, slower process than many market participants currently hope. St. Lousi Fed President noted specifically that the labor market remains particularly tight, and that it could take entire months or quarters before policies drag inflation back to convicing Fed target levels.
Fed's Logan Advocated for Further Patience on Policy
Lorie Logan, President of the Reserve Bank of Dallas reiterated that inflation remains too high, although tremendoous progress has been made.
Fed's Kugler: Inflation Progress to Remain Gradual, Watching for Signs of Labor Deterioration
Federal Reserve (Fed) Board of Governors member Adriana Kugler delivered a speech at the Peterson Institute for International Economics on Tuesday, noting that while inflation remains too high, recent inflation data has been encouraging.
US Dollar Loses Ground on Weak Retail Sales Figures
On Tuesday, the US Dollar, as measured by the DXY Index (DXY), registered a decline, settling at 105.30.
Fed's Barkin: Inflation data is encouraging and more data is needed.
Thomas Barkin, President of the Richmond Fed in the United States, said that recent inflation data is "very encouraging," but he added that he hopes to see progress towards the Fed's 2% inflation target. "For me, two themes are persistence and broadening," Barkin said on Tuesday at an online event hosted by MNI. He said that persistence means overall and core inflation continue to be on a trajectory that is confident of reaching 2%. Broadening means that price pressure on goods and services is easing. Barkin emphasized that the economy may evolve in different ways, which will affect his best rate path for the future.
Fed's Collins: Fed Has Made Significant Progress, but Inflation Remains Stubborn
Federal Reserve (Fed) Bank of Boston President Susan Collins noted on Tuesday that despite significant progress made on inflation by the Fed and its policies, there's still plenty of work to be done.
Senior officials at the Federal Reserve have spoken intensively: efforts to control inflation have been effective, and interest rate cuts still depend on the data.
According to William, the President of the New York Federal Reserve, the US economy is moving in the right direction, although recruitment has slowed down despite generally good economic data. Meanwhile, Richmond Federal Reserve President Barkin stated that he would not consider changing interest rates until he saw inflation persistently fall to the Fed's 2% annual target. It may be reasonable to hold off after one rate cut in the future.
Fed's Barkin: Shelter and Services Inflation Is Not Quite There
Richmond Federal Reserve Bank President Thomas Barkin said on Tuesday that May inflation data was very encouraging, per Reuters.
US Industrial Production Rises 0.9% in May Vs. 0.3% Expected
Industrial Production in the US grew 0.9% on a monthly basis in May, the US Federal Reserve (Fed) reported on Tuesday. This reading came in better than the market expectation for an increase of 0.3%.
Almost no growth in the 'terrifying data' for May in the US, providing further support for the prospect of a Fed interest rate cut.
The retail sales in the United States, known as the 'terrifying data', barely grew in May, and the data for the previous months has been revised down, indicating that consumers are currently facing greater financial pressures.
USA retail sales in May increased by only 0.1% month-on-month, falling short of expectations. The previous value was further revised downward.
Consumer spending has clearly slowed down, is the Fed one step closer to cutting interest rates?
US Retail Sales Rise 0.1% in May Vs. 0.2% Expected
Retail Sales in the United States rose 0.1% on a monthly basis in May to $703.1 billion. This reading followed the 0.2% decline recorded in April and came in slightly below the market expectation for an increase of 0.2%.
US Dollar Steadies Ahead of Fedspeak, Data-packed Session
The US Dollar (USD) trades in the red after being positive for the most part of this Tuesday, that was until US Retail Sales turned into a disaster.
Fed Officials in No Rush to Cut Rates, Looking for Further Progress in Inflation
Federal Reserve officials await more "good inflation" data before cutting rates