Since this week, at least four Federal Reserve officials have expressed their views on the interest rate path. Most of them said that considering that the U.S. economy is more resilient than expected, future interest rate cuts need to be more cautious.

The first to appear was Christopher Waller, a member of the Federal Reserve Board. On Monday, he said at an event held at Stanford University that recent data such as employment and inflation showed that the economic slowdown may not be as large as expected, and the subsequent pace of interest rate cuts should be more cautious than at the September meeting to ensure that secondary inflation does not occur.

"While we do not want to overreact to or be exclusive of these data, I believe they suggest that monetary policy should be more cautious in the pace of rate cuts than was warranted at the September meeting," Waller said in his speech.

On Tuesday, Atlanta Fed President Rafael Bostic said he expects only one more rate cut this year, but that stance is not set in stone and will be reassessed based on the latest data.

On the same day, Mary Daly, president of the Federal Reserve Bank of San Francisco, said that as long as the data meets expectations, further interest rate cuts are still possible, and it would be reasonable to cut interest rates one or two more times this year.

The above three are all current members of the Federal Open Market Committee (FOMC), commonly known as the "voting committee" in the market. The FOMC consists of 12 members, including 7 Fed governors, the president of the Federal Reserve Bank of New York, and 4 other Fed bank presidents. In addition to the Fed governors and the president of the Federal Reserve Bank of New York, the remaining 4 seats are rotated among the remaining 11 regional governors every year.

In addition, Minneapolis Fed President Neel Kashkari said at a conference in Buenos Aires, Argentina on Tuesday that the job market remains strong and inflation is moving toward the Fed's 2% target, and "further modest reductions" in the benchmark interest rate seem appropriate in the coming quarters.

At the policy meeting at the end of September, the Fed cut interest rates by 50 basis points, the first rate cut in four and a half years. The interest rate path "dot plot" released after the meeting showed that the rate may be cut by another 50 basis points before the end of the year, that is, 25 basis points in November and December. The minutes of the meeting released recently showed that the main reason why the Fed took an extraordinary rate cut of 50 basis points was that it was worried that the job market would cool down too quickly.

The Federal Reserve maintained its benchmark interest rate at 5.25%-5.5% at its policy meeting at the end of July, but the number of new non-farm payrolls in July released a few days later was significantly lower than expected, and the unemployment rate unexpectedly rose to 4.3%, triggering Sam's Law, which predicts an economic recession. Although the number of new non-farm payrolls in August rebounded, it was still lower than expected.

However, recently released data showed that the job market was not as weak as expected. In September, non-farm payrolls increased by 254,000, far exceeding the market's expectation of about 150,000; the unemployment rate fell by 0.1 percentage point month-on-month to 4.1%. In addition, the Labor Department also raised the employment data for July and August, with the number of non-farm payrolls in July significantly increased by 55,000 to 144,000.

In addition to employment data, the latest inflation data also exceeded expectations. In September, the US Consumer Price Index (CPI) rose 2.4% year-on-year, 0.1 percentage point narrower than the previous month, but higher than the 2.3% expected by economists. Excluding the volatile food and energy costs, the core CPI rose 3.3% year-on-year, 0.1 percentage point higher than the previous month; it rose 0.3% month-on-month, the same as the previous value, both of which were 0.1 percentage point higher than expected.

Regarding the future path of interest rate cuts, Waller outlined three scenarios: First, if the economy develops as expected, that is, the inflation rate is close to the Fed's 2% policy target and the unemployment rate rises slightly, it can cautiously shift to a neutral stance; second, if the inflation rate falls below 2% or the labor market deteriorates, interest rates can be cut in advance, but this possibility is small; third, if inflation rises unexpectedly, the Fed may suspend interest rate cuts.

"However, no matter which of the above scenarios occurs, a gradual rate cut in 2025 is a foregone conclusion," Waller said.

Bostic said that in the long run, the benchmark interest rate will fall to around 3% to 3.5%, but when it reaches this level will depend on the situation of the labor market and inflation. Bostic also said that the US GDP growth rate is expected to reach around 2.6% this year, but will slow down to 2% in 2025 due to the decline in household savings. As for the trend of inflation, he believes that there will be fluctuations, but he is quite confident in achieving the 2% target.

Daly said that the 50 basis point rate cut in September was an "appropriate adjustment" to the interest rate policy stance. The current policy is still restrictive and far from the ultimate goal. The Fed "must remain vigilant and act consciously" to strive to achieve the dual goals of full employment and stable prices.

Since last week, as employment and inflation in September continued to exceed expectations, the market's expectations for the Fed to further cut interest rates have cooled significantly. As of 17:20 Beijing time on Wednesday, data from the Chicago Mercantile Exchange's FedWatch tool showed that the probability of no interest rate cut in November was 5.8%, up 2.8 percentage points from the previous day, and the probability of a 25 basis point rate cut was 94.2%.

Ryan Sweet, chief U.S. economist at Oxford Economics, said in a research report last week that the unexpected increase in CPI in September does not mean that inflation is accelerating again, nor will it prevent the Federal Reserve from cutting interest rates by 25 basis points at its November meeting. The Federal Reserve needs to continue to normalize interest rates to keep the economy on the path of a "soft landing."

Bai Xue, senior vice president of research and development at Orient Jincheng International Credit Rating Co., Ltd., also said that the Fed is expected to continue the process of lowering interest rates in November, with a high probability of a 25 basis point cut. She pointed out that the US CPI data in September showed that the inflation level has continued to decline for more than six months, and the rent price, which has the largest weight in core inflation, is also in a downward channel. The overall process of de-inflation is relatively smooth. The rebound in the growth rate of the core CPI in September was mainly driven by transportation and medical prices, and used car prices, which is not enough to form the basis for "re-inflation". In addition, judging from the performance of employment data, which the Federal Reserve currently pays more attention to, the number of initial unemployment claims in the United States in early October has exceeded expectations for two consecutive weeks due to the impact of hurricanes and Boeing strikes, which may weaken the employment data in October.

Ed Yardeni, president and senior analyst of research firm Yardeni Research, is among those who bet on "no rate cuts." He told Yahoo Finance on Tuesday that economic data will continue to be better than expected and it would be a mistake for the Fed to continue cutting interest rates this year.

"While the Fed has made great progress in reducing inflation indicators so far, the task is not really completed. If monetary policy is relaxed too much, inflation may come back. (After cutting interest rates by 50 basis points in September) the Fed has already gone ahead and does not need to cut interest rates again this year," Yardeni said. $BTC $ETH $BNB