Roger Ferguson, former vice chairman of the Federal Reserve, said in an interview that he believes the Fed will not cut interest rates at its upcoming meeting, and the likelihood of a rate cut at the next meeting is also very low. Ferguson described the current Fed stance as being in a “wait-and-see mode,” meaning it remains vigilant about inflation risks while expecting inflation to slow further.
“I think they (the Fed) will send a highly vigilant signal at this meeting and will be very patient before cutting interest rates — this might disappoint some people,” Ferguson said. He pointed out that there are hidden concerns about inflation expectations both in the short term and the long term, which is a key factor prompting the Fed to be cautious about signaling rate cuts.
Ferguson emphasized that external factors, such as oil price concerns caused by the tense situation in the Strait of Hormuz, are complicating the Fed’s decision-making. “All signs suggest that the Fed will be extremely cautious this year,” he said, noting that these uncertainties make it difficult to achieve what he calls an “ideal rate cut” — a policy shift driven by manageable inflation rather than economic weakness.
Looking ahead, Ferguson believes that while the hope for a rate cut in 2025 is slim, the situation may become clearer next year. “It is hoped that by next year, the trend of a sustained slowdown in inflation will become clearer. At that time, they may slightly adjust interest rates,” he added.
However, he cautioned against being overly optimistic about the recent positive inflation data, noting that there had been disappointing data fluctuations after a similar trend last year.
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