Under the spotlight of global financial markets, on December 20, the statements from several key Federal Reserve officials were like a giant stone thrown into a calm lake, stirring up ripples and outlining the general direction of future monetary policy for market participants. Among them, the remarks of Mary Daly, President of the San Francisco Federal Reserve Bank, and John Williams, President of the New York Federal Reserve Bank, became a key breakthrough for outsiders to gain insight into the Fed's internal interest rate decision-making discussions.
In her recent public speech, Daly deeply analyzed the considerations behind the Fed's decision to cut rates by 25 basis points this week. She stated frankly that this was by no means an easy decision, but a difficult choice made after repeated weighing and careful consideration within the Fed. Daly clearly aligned herself with Chairman Powell's position, repeatedly emphasizing that future adjustments to monetary policy must be done with utmost caution. She solemnly announced that the Fed has successfully completed the crucial phase of recalibrating rates, which means that an important milestone in the previous rate adjustments has come to a close. Daly further revealed that, considering various factors, a cumulative rate cut of 100 basis points is just right, and she agreed with the Fed's prediction of two rate cuts in 2025. However, Daly also reminded the market that before discussing whether to start a new round of rate cuts, the Fed would definitely adopt an extremely rigorous attitude and patiently wait for more decisive economic information to surface. According to her judgment, the actual number of rate cuts next year is likely to be far lower than the general market expectation.
Coincidentally, on the same day, John Williams, President of the New York Federal Reserve Bank, also shared his profound insights on the current economic situation and its relation to monetary policy in a public setting. His views echoed Daly's but with different emphases. Williams clearly pointed out that based on the detailed data at hand, the benchmark path is clearly pointing towards further rate cuts. As a core member of the Federal Open Market Committee (FOMC) with permanent voting rights, every word from Williams carries significant weight and attracts market attention. His remarks revealed that there is a certain possibility of rate cuts supported by the existing economic data, while also emphasizing that even so, the Fed remains vigilant and will continuously monitor various economic indicators’ dynamics as precise guidance for subsequent decisions.
From the statements of these two Federal Reserve leaders, it is not difficult to see that in today’s ever-changing and complex global economic environment, the Fed is maintaining a highly cautious attitude, carefully calibrating the nuances of its monetary policy. Daly focuses on conservative actions, waiting for more data to inject certainty into decision-making; while Williams points out the potential trend of rate cuts based on current information. Ultimately, both convey a clear message: how the Fed's next move unfolds will be closely tied to the performance of the U.S. real economy, inseparable. This fully demonstrates the Fed's unwavering determination—to use monetary policy to inject continuous power into economic growth while ensuring that price levels remain stable and controllable, thereby achieving robust and sustainable economic development.
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