The Federal Reserve Board recently held a closed-door meeting, where several core members expressed their views on the direction of monetary policy, financial risk prevention, and inflation management, showcasing a distinctly 'hawkish' overall stance and clearly signaling a 'refusal to hastily cut rates and a commitment to price stability.'
Core Member Speech: Confronting Risks, Refuting Market Overexpectations
Powell (Chairman): Although the current financial system appears robust, potential risks are continuing to accumulate, especially as highly leveraged speculative funds are highly sensitive to Federal Reserve policy directions. 'If we hastily initiate rate cuts, it is essentially providing liquidity to speculative markets, condoning casino-style trading. The Federal Reserve must adhere to its policy bottom line and never allow speculators to profit.'
Jefferson (Vice Chairman): Criticizes the market's mindset of viewing rate cuts as a 'foregone conclusion', believing that early bets on rate cuts constitute a risk. 'Catering to the market's unrealistic expectations is equivalent to condoning the expansion of risks. We cannot tolerate inflation returning, as that is an insurmountable red line, even if it disappoints the market in the short term.'
Barr (Vice Chairman of Supervision): Directly points out the hidden dangers in the banking system, emphasizing the risk undercurrents in small and medium-sized banks in the real estate loan sector. 'If current policies are loosened, it will accelerate the expansion of leverage. It must be clear: monetary policy and financial regulation need to be 'dual hard', both are indispensable to maintain the stability of the banking system.'
Lisa Cook (Director): Warns that inflation management has not yet 'achieved success and retired', although recent data has declined, the upward pressure on service sector wages still exists. 'If policies are loosened now, it may lead to a significant resurgence of inflation two years later, at which point the situation will be even harder to control, and we cannot take that risk.'
Bowman (Director, Long-term Hawkish): States that high interest rates are a 'necessary bitter medicine' for small businesses and ordinary families, emphasizing the independence of the Federal Reserve. 'Any political demand expecting us to compromise due to short-term pain is unrealistic. The Federal Reserve's decisions are not subject to political interference, only aiming to stabilize prices and maintain financial stability.'
Waller (Director): Clearly delineates the Federal Reserve's responsibilities, refuting the market's misunderstanding of policy functions. 'Our mission is to stabilize prices, not to inflate stock markets, cryptocurrencies, and other risk asset prices. If funds bet that the Federal Reserve will compromise and cut rates, they will ultimately be taught a lesson by market rules.'
Kugler (Director): Using the historical example of Latin American countries falling into inflation traps due to shortsighted policies, advocates for long-term-based policies. 'The United States must not repeat the same mistakes, even if it may lead to speculative bubbles bursting in the short term, we must maintain a hawkish stance to avoid laying hidden dangers for long-term economic disasters.'
Meeting Consensus: Guarding Financial Stability with 'Iron Discipline'
The meeting ultimately reached a consensus and issued a statement, with a clear and firm core position: 'Maintaining the stability of the financial system must rely on iron discipline. The Federal Reserve will not be shaken by short-term market noise, nor will it retreat under external pressure. We are willing to endure short-term economic pain and will never sacrifice long-term stability, nor plant the seeds of future crises.'#美联储会议