St. Louis Fed President: The path of interest rate cuts should be more gradual

ChainCatcher news, a Federal Reserve official stated that he believes the decision to cut interest rates last month was a close call, as the current economic outlook seems different from when the Fed began lowering rates four months ago. St. Louis Fed President Bullard mentioned that by the time of last month's meeting, the risks of inflation hovering between 2.5% and 3% had increased.

Therefore, he believes that caution should be exercised in further rate cuts. Bullard had previously hinted that he supported the Fed's decision to cut rates by 50 basis points in September. "Since last September, the situation has changed, economic data has been stronger, and inflation numbers have exceeded expectations. So I have changed my assessment of the risks; future rate cuts must be gradual and more gradual than I envisioned in September."

Bullard stated that the job market is in good shape and needs to be closely monitored, but there are "still inflation issues" in the Fed's mandate. Due to his estimate of the neutral rate being slightly higher than most of his colleagues, the currently set rate may be slightly below the appropriate limit.