“维持政策的可选择性似乎很重要，考虑放慢降息步伐或暂停降息的时机可能正在逼近，以审慎评估当前经济环境、即将到来的信息和不断演变的前景，”他补充说。① St. Louis Federal Reserve Bank Governor Mussalem said that it may be appropriate to suspend interest rate cuts as early as this month, stressing that the data will guide the decision; ② He hopes to preserve all options until the Federal Reserve's December meeting, support a gradual reduction in interest rates, and adopt a patient approach.
Financial Services Association, December 5 (Editor Huang Junzhi) Federal Reserve Bank of St. Louis (Federal Reserve Bank of St. Louis) Governor Alberto Musalem (Alberto Musalem) suddenly said on Wednesday that it might be appropriate to suspend interest rate cuts as early as this month. He stressed that his decision depended on upcoming data.
Mussalem said he hopes to reserve all options until the next meeting of the Federal Reserve on December 17-18. He stressed that he may prefer a gradual reduction in interest rates, but supports a patient approach. He said that the risk of cutting borrowing costs too fast is greater than the risk that the degree of easing is too low.
“Maintaining policy selectivity seems important. The time to consider slowing down the pace of interest rate cuts or suspending interest rate cuts may be approaching to carefully assess the current economic environment, upcoming information, and evolving prospects,” he added.
When asked if he thought officials should suspend interest rate cuts at a meeting in two weeks, Mussalem said the exact timing would depend on the state of the economy.
“It could be December, maybe January. Maybe later,” he said.
Since September of this year, Federal Reserve officials have cut interest rates by 0.75 percent. Policymakers still have plenty of data to look at before making decisions this month. A large number of important data will be released in the next two weeks, including Friday's monthly job market report and next Wednesday's consumer price index (CPI) for November.
Mussalem added, “I'll wait to see those data until I can determine which approach I prefer.”
He reiterated that the Federal Reserve is close to achieving the goals of employment and price stability, and that the monetary policy position is also very good. He described the policy as “moderately restrictive.”
Recently, as inflation seems to be making a comeback, and with Trump re-elected as US President and the impact of his policies is uncertain, many officials have called for a cautious approach to cutting interest rates.
Mussalem said he expects the inflation rate to move closer to the Federal Reserve's 2% target in the next two years. However, he added that data released since September showed that progress in price increases could stall or even risk a reversal.
In view of this, he called on policymakers to act with caution, as it is currently unclear where the neutral interest rate (which neither stimulates nor inhibits growth) is. He also said that it is uncertain whether productivity growth will continue.
Federal Reserve Bank of Richmond Governor Thomas Barkin also delivered a speech on Wednesday. He expressed support for slowing the pace of interest rate cuts to bring the policy to “a certain level of restraint.”
“In my opinion, normalization is a slower, more cautious path aimed at reducing interest rates to neutral,” he said.