Recently, many senior Federal Reserve officials have expressed their views on the prospects of the U.S. economy. They generally believe that the inflation rate is steadily declining towards the 2% target set by the Federal Reserve, which provides room for future interest rate cuts.However, they also pointed out that the Trump administration's policies create a considerable degree of uncertainty and need to be closely watched for their potential impact on the economy.

Minneapolis Fed President Kashkari: Moderate interest rate cuts may be possible before the end of the year

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said policymakers may cut interest rates modestly before the end of the year as inflation moves closer to the Fed's target.He emphasized that it would be wise to keep interest rates stable for now until there is a clearer understanding of tariff, immigration and tax policies.Kashkari pointed out that the impact of the Trump administration's new policies, including restrictions on immigration, tariff measures and tax cuts, on the economy and inflation remains highly uncertain.

Kashkari's comments came after the release of the latest U.S. non-farm payrolls report.Data showed that 143,000 new non-agricultural jobs were created in January, lower than market expectations of 170,000, but the unemployment rate fell to 4%, the lowest level since May last year.Average hourly wages increased by 0.5% month-on-month, the largest increase since August last year.Kashkari believes the labor market remains strong, although the heat has subsided.He also mentioned that the economy has shown resilience in a high-interest rate environment, suggesting that neutral interest rates may be higher than previously expected.

Chicago Fed President Goolsbee: Interest rates may fall in the next 12 to 18 months

Austan Goolsbee, chairman of the Chicago Fed, who serves as a voting member of the Federal Open Market Committee (FOMC) this year, said the Fed may leave interest rates unchanged for the time being, but he expects them to fall over the next 12 to 18 months.He emphasized that uncertainty about Trump administration policies, especially in terms of tariffs, immigration policies and tax cuts, may affect the speed of interest rate cuts.Goolsbee pointed out that the latest non-farm payrolls report shows that the labor market is solid and the United States is approaching full employment.He believes that inflation data has increased recently, mainly due to the base effect, and inflation data is expected to improve later in the first quarter.He also noted that wage growth is roughly in line with the 2 percent inflation target.

Federal Reserve Governor Kugler: A stable job market provides patience in decision-making

Adriana Kugler, governor of the Federal Reserve, said that U.S. economic activity has shown resilience and has a solid foundation.She pointed out that the latest employment data is consistent with a healthy labor market, with companies creating jobs to support the market.Kugler believes that a stable job market allows the Fed to remain patient when making decisions.She emphasized that the United States has not yet achieved its 2% inflation target and it is reasonable to temporarily keep policy interest rates unchanged.Kugler also mentioned that there is considerable uncertainty about the impact of the Trump administration's policies and requires further observation.

Uncertainty caused by Trump administration policies

Fed officials generally believe that the Trump administration's policies, especially in the areas of trade and immigration, may have important implications for the economy.Federal Reserve Chairman Jerome Powell said at a recent press conference that policymakers are waiting to see what policies the Trump administration will introduce and need to wait for the policies to be clear before they can make a reasonable assessment of their economic impact.He declined to comment on Trump's call for the Federal Reserve to cut interest rates immediately, saying it was inappropriate.

Federal Reserve Governor Christopher Waller also said he supports interest rate cuts this year despite the Trump administration's possible widespread tariffs.He believes that tariffs may have limited impact on inflation, and if the inflation outlook develops as expected, he will support continued interest rate cuts in 2025.

Labor market and inflation trends

The latest non-farm employment report showed that the United States created 143,000 non-farm jobs in January, lower than market expectations, but the unemployment rate fell to 4%, the lowest since May last year.Average hourly wages increased by 0.5% month-on-month, the largest increase since August last year.These data show that the labor market remains solid.However, consumer confidence fell to its lowest level since July last year, and Americans 'inflation expectations for the coming year also rose.This suggests that despite the strong job market performance, consumer confidence in the economic outlook has weakened.

At the same time, the Federal Reserve pointed out in its latest semi-annual monetary policy report that although the financial system is generally sound and resilient, valuations remain high relative to fundamentals in markets such as stocks, corporate debt and residential real estate.The report emphasizes that the committee is prepared to use all tools to achieve the goals of full employment and price stability.In addition, the report also mentioned that the total debt of households and non-financial companies as a proportion of gross domestic product (GDP) continues to decline and is currently at its lowest level in the past two decades.