Live Updates > Live Update Details
2025-10-10 20:58:54
[Federal Reserve Officials Signal Caution in Rate Cuts, 25 Basis Points Become the New Normal] ⑴ Federal Reserve Board Governor Waller explicitly stated on Friday that despite the weakening labor market, the central bank should adopt a cautious quarterly percentage point pace for rate cuts. ⑵ He noted that multiple private data, including the ADP report, show the labor market losing momentum, corroborating the weak labor market. ⑶ Waller emphasized that the current policy path should adhere to the strategy of "25 basis point rate cuts, continued observation, and gradual progress," avoiding overly aggressive adjustments. ⑷ His cautious stance stems from the contradictions in economic data: GDP growth may rebound, while the labor market continues to weaken, with the two trends diverging. ⑸ This view stands in stark contrast to the deep rate cuts advocated by new Board member Milan. Waller warned that a one-time 75 basis point rate cut could result in a policy error. ⑹ The market generally expects the Fed to cut interest rates by another 25 basis points at its meeting on October 28-29, and to make an adjustment of the same magnitude in December. ⑺ Waller believes that the current weak labor market has suppressed the risk of a wage-price spiral, providing room for continued interest rate cuts.
