Fed Philadelphia President Harker is dovish! "There should be two more rate cuts within 2025, tariffs are just temporary."

Philadelphia Federal Reserve President Anna Paulson expressed support for two more rate cuts within the year and advocated ignoring the short-term inflation effects of tariffs, laying a dovish tone for policy in the second half of the year (previous context: The Federal Reserve's September FOMC meeting minutes revealed hawkish signals: two more rate cuts in 2025, but insufficient constraints on inflation) (background: A surprise! The U.S. September small non-farm employment 'decreased by 32,000', marking the largest drop in two and a half years, raising the probability of a rate cut in October to 99%) The newly appointed President of the Philadelphia Federal Reserve, Anna Paulson, made her first public appearance on October 13, U.S. time, and clearly stated her monetary policy stance: she supports lowering the federal funds rate twice by the end of 2025, totaling 50 basis points, and emphasized that decision-makers should 'see through' the temporary price increase effects of tariffs. This statement immediately sent a dovish signal to global markets and reshaped expectations for interest rate trends before the end of the year. Dovish signals and rate cut suggestions Paulson pointed out in her public remarks that the already realized 25 basis point rate cut this year was 'timely', and the two cuts before the end of the year would accumulate a total easing of 75 basis points for 2025, which is roughly in line with the median of the Federal Reserve's 'Summary of Economic Projections' (SEP). This means that the federal funds rate at the end of the year could be closer to the 4% range, providing substantial relief to financing costs for businesses and households. The impact of tariffs is 'only temporary' She specifically mentioned the White House's tariff policy, stating that the effective tariff rate for 2024 is only 2.3%, while it has climbed to 13.1% this year. Paulson believes that the price increases caused by tariffs are supply-side shocks, which have limited effects on overall demand and long-term inflation expectations. She said: Policies must distinguish temporary price noise and should not overreact to short-term inflation illusions. This clearly conveys that monetary policy decisions should not be hindered by temporary price increases, but should instead adopt a loose approach to stabilize economic momentum. Employment priority rises The labor market is the core reason for Paulson's abandonment of hawkish strategies. Although the unemployment rate is still close to full employment levels, she pointed out that momentum is 'sliding in the wrong direction', and the risks have 'significantly increased'. In other words, preemptively loosening rates is a preventive measure rather than a reactive one. This also suggests that the Federal Reserve's balance between 'prices' and 'employment' has shifted towards the latter. Market pricing and internal divisions Paulson does not have FOMC voting rights this year but will join the voting bloc in 2026. Her views symbolize the main direction within the Federal Reserve. However, cautious members like Governor Barr still warn of persistent inflation. External markets are more aggressive than the official stance, with Bank of America analysis showing that investors bet the benchmark rate will fall below 3% by the end of 2026. The current 'data-dependent' framework remains, and whether the next steps will be implemented depends on the late October FOMC statement and subsequent inflation and employment figures. Related reports Federal Reserve officials criticize Trump for 'cutting rates too quickly': High unemployment is not a recession; monetary independence must be restored After Bitcoin reached a new high, how to quickly explain cryptocurrency investment to those around you? 'Fed Philadelphia President Paulson is dovish! Two more rate cuts should be made within 2025, tariffs are only temporary' was first published in BlockTempo, the most influential blockchain news media.