Relative to this "conclusion", I would prefer you not to say it's right
Federal Reserve Vice Chairman Roger Ferguson stated on CNBC's "Squawk Box" that the Fed is unlikely to cut interest rates at this week's meeting: under current economic conditions, the central bank is in a "wait-and-see" mode and must remain patient. "The Fed will not cut rates at this meeting or even at the next meeting. They hope to see further declines in inflation but will continue to exercise caution." He indicated that the Fed will convey a message of "vigilance and patience" to the market in this week's statement, which may disappoint some market participants.
The so-called "reasonable rate cuts" would only occur if inflation declines without economic slowdown or turmoil in the labor market, which seems unlikely this year. "The Fed is very close to a soft landing this year, but there are still many risks. Perhaps next year will present a clearer outlook; if inflation continues to decline, limited rate cuts may be on the agenda.
When the host reminded him of Trump's approach to "cut rates while inflation is low and raise them again if necessary," Ferguson cautiously responded to the suggestion. "In the past, inflation has only briefly declined. There is also a risk of worsening inflation expectations. The Fed was slow to respond in the last inflation cycle. They do not want to make the same mistake again.
