Federal Reserve Officials Turn Hawkish Overnight, Further Rate Cut Space May Be Limited

BlockBeats News, November 14th, Federal Reserve officials collectively turned hawkish overnight, further limiting the space for interest rate cuts. Minneapolis Fed President Kashkari took the lead in stating that he did not support the Fed's October rate cut decision, but remains cautious about the best course of action for the December meeting. The underlying resilience of U.S. economic activity is stronger than expected, and the Fed had previously signaled a pause in rate cuts at the October meeting.

Fed's Harker, on the other hand, stated that monetary policy still needs to remain tight to curb inflation and bring it back to the target level. The Fed faces challenges in its dual mandate of inflation and employment, making it a difficult period for monetary policy. Harker also expressed no concern about the weakening of the dollar, stating, "We started from a state of the dollar being extremely strong, so this year's weakening is largely just bringing the dollar closer to its theoretically fair value, making it more reasonable compared to other currencies."

Fed's Mester had a relatively moderate stance but still indicated that there is limited room for further easing of monetary policy. Mester stated, "Looking ahead, we need to proceed cautiously. I believe we need to continue putting pressure on inflation above the target while providing some support for the labor market."