Several Federal Reserve voting members speak out, overall tone "not in a hurry to cut interest rates"

Last week's April CPI injected a shot in the arm for the market, reigniting rate cut expectations. Since the beginning of this week, many Federal Reserve officials have spoken intensively, releasing clearer signals on the future interest rate path.

Overnight, Federal Reserve Governor Waller, New York Fed President Williams delivered speeches, followed by Atlanta Fed President Bostic, Cleveland Fed President Mester, and other officials.

Overall, although inflation data boosted market confidence, Federal Reserve officials as a whole remain "hawkish," stating that they still need to see a sustained downward trend in inflation before making a rate cut decision.

Federal Reserve officials have differing views on the specific rate cut path. Some officials believe that if the cooling trend in inflation from last week can continue for a long time, a rate cut by the end of the year is very likely. At the same time, considering the scenario of consecutive increases in core inflation in the first quarter of this year, some officials also indicated that a restrictive monetary policy may not exit too quickly.

Federal Reserve Governor Waller "dovish": Considering rate cut by the end of the year if data supports

A leading candidate for the next Federal Reserve Chair and current Federal Reserve Governor Waller stated that although recent data suggests progress has been made in inflation, he needs to see "a few months" of good inflation data before starting to cut rates, believing that further rate hikes are unnecessary.

Waller provided more details on the timeline for rate cuts in a subsequent media interview:

"If data remains soft for the next three to five months, the Federal Reserve may consider cutting rates by the end of 2024; if enough favorable data is obtained, rate cuts could be considered by the end of this year or early next year."

Regarding inflation data, Waller believes that the data indicates that U.S. inflation has not accelerated, and further raising policy rates "is likely unnecessary."

FOMC Permanent Voter Williams: No rate cut before the fourth quarter

FOMC Permanent Voter and New York Fed President Williams stated that there will be no rate cut before the fourth quarter.

Regarding the latest inflation data, Williams believes that "one data point does not represent a trend," and the Federal Reserve's primary task remains to control the inflation rate back to 2%.

On interest rates, Williams stated that rates will be restrictive, but the effectiveness "may be slightly weaker."

2024 FOMC Voter Bostic: Not in a hurry to cut rates, first rate cut needs caution

2024 FOMC Voter and Atlanta Fed President Bostic stated that the U.S. economy has always been quite resilient, and economic growth will continue, but inflation will slow down.

Regarding interest rates, Bostic stated that the Federal Reserve's policy stance is restrictive, and it will take longer for the Federal Reserve to decide on monetary policy.

Bostic believes that the Federal Reserve must "approach the first rate cut cautiously," and stated:

"It may be necessary to delay the rate cut to ensure that inflation does not rebound, avoid sparking investment enthusiasm and other expenditures."

Last week, Bostic mentioned that if the future can continue the trend of "steady inflation slowdown, sustained economic momentum," then "a rate cut near the end of the year may be appropriate," and if the situation does not align, it "will not be limited to specific policy guidelines."

2024 FOMC Voter Mester: Hopes to See Inflation "Decline for a Few More Months"

In a speech, 2024 FOMC voter and Cleveland Fed President Mester predicted that the US economic growth rate will be above trend this year, and inflation will fall, but it will take longer than expected.

Regarding interest rates, Mester believes that the current policy is good, but she needs to see inflation decline for a few more months, and inflation expectations are also worth paying attention to.

Mester added that there is not too much risk in maintaining the current level of interest rates because the labor market is performing well, which means that the restrictiveness of the policy may not be as prominent as imagined.

Overall, Mester believes that the Fed's patience is the right policy, and a methodical, patient, and holistic approach is needed to deal with the data.

Mester previously stated on Monday that she no longer thinks it is appropriate for the Fed to cut interest rates three times in 2024, as this number of rate cuts may be too many. "I have publicly stated before that my forecast is the same as the median, which is three times, but based on the economic developments I currently see, I don't think this is still appropriate."

Boston Fed President Collins: Interest Rates Will Stay High for Longer

Boston Fed President Collins stated that she hopes to see more evidence that price pressures are moving towards the 2% target.

Collins said:

"I think this is a very important moment or period for patience, the data will be very complex, and it will take longer than I expected."

Collins also added that the current restrictive interest rates may further pressure economic growth.

Earlier this month, Collins made a speech conveying the same stance: interest rates may need to stay high for longer than previously thought to curb demand and alleviate price pressures