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2025-09-18 21:17:25
[The Fed is moving toward tolerance for inflation well above target] ⑴ New Fed Governor Milan hinted that the federal funds rate may need to be lowered by 1.25 percentage points over the next two meetings. ⑵ This statement sends a strong signal to the market, foreshadowing the policy direction of the Fed's new chairman next year. ⑶ Given that the Fed's current policy has shifted toward supporting the labor market rather than combating inflation, this shift could pose long-term risks that are not yet fully reflected in current market pricing. ⑷ Chief Economist Joe Brussels stated that given the potential personnel changes at the Fed next year, caution is warranted regarding future economic forecasts. ⑸ He believes that the Fed is moving toward tolerance for inflation well above target.
