Fed's Paulson: Fed may further cut interest rates if inflation cools

According to sources, Philadelphia Fed President Paulson stated that the Fed may further cut interest rates if inflation cools, but hinted that any additional rate cuts may not be immediate. Paulson, speaking in Philadelphia on Saturday, expressed cautious optimism that pressure on rising prices in the coming months may ease. This year marks her first time serving as a voting member of the Fed's policy committee. She noted that the current target range of 3.5% to 3.75% for interest rates is still somewhat tight, meaning that the rate level is sufficient to curb inflation, which could create conditions for further rate cuts in the future. According to the released speech transcript, Paulson stated that if inflation eases and the economy stays on track, a moderate adjustment to the federal funds rate later this year may be appropriate. Paulson indicated that signals regarding the health of the job market are mixed, suggesting that while the market is under pressure, it is not collapsing. She is awaiting more data to clarify the situation. These remarks suggest that she may want to see more evidence about the economic evolution in the coming months before supporting further policy adjustments.

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