Dovish Fed officials: Rate cuts are feasible, but the pace should slow.

Chicago Fed President Goolsbee recently stated that although the U.S. economy maintains full employment and China has only three regular futuresinflation has eased somewhat, uncertainty in policy will slow the pace of future interest rate cuts.

In an interview, Goolsbee mentioned that the current U.S. economic situation is favorable, with full employment and moderate inflation providing conditions for further rate cuts. However, trade policies under the Trump administration and other uncertainties may affect the economic outlook, prompting the Fed to be more cautious to avoid hasty monetary policy adjustments.

"The U.S. economy is close to full employment, with inflation issues alleviating, but changes in global economic conditions and domestic policy mean rate cuts will be more gradual," Goolsbee added. He stressed that although the Fed took a series of rate-cut measures last year, more time is needed in the current uncertain environment to observe and assess future economic data.

Currently, the benchmark rate of the Federal Reserve remains in the range of 4.25% to 4.5%. Goolsbee noted that inflation has declined in recent months, yet the Fed must remain vigilant against a resurgence of inflation pressures, especially in areas like the labor market and commodity prices.

While economic growth is stable, Goolsbee also pointed out that the effects of monetary policy might experience delays in the coming period. The Fed will continue to monitor employment data and other macroeconomic indicators to ensure lower interest rates are achieved gradually without overheating the economy.

Goolsbee particularly highlighted that the impact of the Trump administration’s tariff policies and immigration issues on the U.S. economy remains uncertain. The Fed must stay alert to these factors and consider their potential economic impacts when formulating monetary policy.

In summary, Goolsbee stated that although the U.S. economy shows strong growth potential, policy uncertainties require the Fed to adopt a more cautious approach, gradually implementing rate cuts rather than rushing into drastic adjustments.

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