BlockBeats News: On January 15, multiple Federal Reserve officials emphasized on Wednesday that maintaining independence in monetary policy decisions is crucial for the central bank. At the same time, officials generally signaled that a rate cut might be postponed at this month's meeting, citing the resilience of the U.S. economy and persistently high inflation, which means monetary policy should remain restrictive.
When responding to subpoenas issued by the U.S. Department of Justice regarding the Federal Reserve's headquarters renovation project, and whether the ongoing investigation could affect policy decisions, several officials emphasized that political or judicial pressures should not interfere with monetary policy decisions. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, explicitly supported Powell's position, stating that the investigation essentially touches on the issue of monetary policy independence. He added that regardless of changes in leadership, the Federal Reserve would continue to make decisions based on data and analysis.
Chicago Fed President Goolsbee, Atlanta Fed President Bostic, and New York Fed President Williams also emphasized that the Federal Reserve's ability to set interest rates free from political interference is crucial for maintaining long-term price stability. In contrast, Fed Governor Mullaney downplayed the impact of the survey, stating that inflation is on the right track to decline and expressed reservations about some central bank governors publicly supporting Powell.
Regarding the economic outlook, with the exception of Mullan, most officials indicated that another rate cut at the FOMC meeting in late January is unlikely. Kashkari stated directly that, given the still-elevated inflation and the strong economic performance, current interest rates should remain unchanged, but conditions for a rate cut later this year may emerge. The market generally expects the Federal Reserve to resume rate cuts no earlier than after June at the earliest.
Bostic emphasized that policies still need to maintain restraint on economic activity, and the Federal Reserve still has "a long way to go" before achieving its 2% inflation target. Overall, a consensus is emerging within the Fed: maintaining interest rate stability in the short term is a more prudent choice before inflation clearly recedes further.