The Federal Reserve (Fed) explained that some of its officials expect the US central bank to continue cutting interest rates throughout 2025 and are not convinced that it will ease at the December meeting.
Fed Governor Christopher Waller spoke at a Washington conference saying he was inclined to support reducing borrowing costs at the next meeting and ensuring that economic data remains supportive of policy.
He added that he was concerned that inflation may stop moving towards 2% by looking at the price indicators in the core services category.
Waller believes that the evidence is strong that policy remains significantly restrictive and that another cut only means that we are not suddenly pressing for the next step.
The factors supporting further rate cuts are that the labor market looks balanced and the Fed has the opportunity to keep rates on hold.
New York Fed President John Williams and his Atlanta counterpart Raphael Bostic had slightly different statements. Each said the economy continues to look strong and inflation is likely to continue to decline towards the Fed's target and that more cuts are needed.
However, they remained silent on expectations for a December rate cut.
However, some Fed officials have signaled support for a more gradual pace of rate cuts in the coming months.
Meanwhile, the Fed cut rates in September after pushing them to a high of 5.25% to 5.5% to help ease inflationary pressures from a peak of 7.2% in mid-2022.
Chairman Jerome Powell has been concerned about the risks of a weak labor market despite finding that previous reports were understated due to strikes and disasters.
Labor Statistics will release its November jobs report on Friday, which will be a key indicator ahead of the next Federal Open Market Committee meeting on December 17-18 in Washington.
