Fed Member Advocates for Transparency on Interest Rates as ECB Member Anticipates Moderate Cuts

Among global economic developments, San Francisco Fed President Mary Daly and Fed Governor Adriana Kugler highlighted the strong stance of the U.S. economy while leaving the door open for a potential interest rate cut. Robert Holzmann from the European Central Bank (ECB) is evaluating the probability of a moderate rate cut at the upcoming meeting.

Daly's Suggestion for Open-Mindedness San Francisco Fed President Mary Daly stated that the U.S. economy is in a robust position, noting that inflation is moving toward the 2% target and the labor market is balanced. Daly does not rule out the possibility of an interest rate cut at the Federal Reserve's meeting in December but emphasizes that it is not certain. "We need to reassess our policy. We should discuss whether this will happen in December or later," said Daly, expressing that they need to remain open-minded at this point.

Goolsbee: “Interest Rates May Decline Next Year” Chicago Fed President Austan Goolsbee reiterated that interest rates would need to decrease further within the next 12 months as inflation decreases. Goolsbee stated that this step is necessary to avoid harming the labor market but did not provide a clear indication regarding the timing or pace of rate cuts. "I believe interest rates will reasonably decline from their current levels within the next year," he said, while noting that the central bank assesses the situation every six weeks if conditions change. Meanwhile, financial markets assess the probability of the Fed making a quarter-point rate cut at its meeting on December 17-18 as 75%.

Fed Governor Adriana Kugler also noted that inflation is following a steady path toward the 2% target and that the labor market remains strong. "We have made significant progress in recent years within the framework of our maximum employment and price stability goals," Kugler remarked, evaluating the current state of the economy positively. Although a modest cooling in the labor market is observed, it remains generally robust.

Moderate Rate Cut Expectation from ECB Member Holzmann Robert Holzmann, a member of the European Central Bank (ECB) Governing Council, stated in a recent comment ahead of the upcoming ECB meeting that the rate cut would be "moderate." "Inflation developments are progressing in the right direction, but upward deviations are observed," Holzmann said, adding that the ECB might make another quarter-point cut. Geopolitical uncertainties make actions following this decision more uncertain, though the rate cut is not confirmed but is among the possibilities. Holzmann highlighted that potential fluctuations in energy prices and the geopolitical environment under President Trump could make price increases more likely. Known as one of the more hawkish voices at the ECB, Holzmann mentioned that they are facing various challenges, but data are not yet sufficient for a strong rate cut. The ECB will continue to analyze the impacts of economic indicators and international developments as it reviews its monetary policies at the year-end meeting.