Fed's New Voting Member Paulson: Rate Cuts Can Wait, Employment More Worrying Than Inflation

Odaily News Paulson hinted that she agrees with the mainstream view that there is no need to rush into another rate cut. Paulson, who will become a voting member on interest rates this year, supports the Fed's decision to cut rates in the past three meetings.

She stated that she expects meaningful progress toward the central bank's 2% inflation target by the end of this year, but she is comfortable with keeping rates steady at the Fed's upcoming meeting on January 27-28. She believes interest rates remain sufficiently high, slightly above the neutral level that neither stimulates nor restrains growth, and said maintaining this level for now is appropriate to help complete the task of lowering inflation.

At the same time, Paulson indicated she might lean toward a moderate rate cut later this year, either if inflation data confirms her expectations that price pressures are easing, or if evidence emerges showing an unexpected deterioration in labor market conditions. (Jin10)