Summary
- Fed Board member Nellie Liang said a total of 150bp in rate cuts is needed this year.
- She cited signs of a recent labor-market slowdown and said preemptive monetary easing could help mitigate downside risks to the economy.
- The comments are seen as more dovish than some market expectations for gradual cuts, and are fueling market focus on this year’s monetary-policy direction.
A member of the U.S. Federal Reserve (Fed) reiterated that a substantial cut in the benchmark interest rate is needed this year to prevent a slowdown in the labor market.
According to Walter Bloomberg, a breaking-news account, on the 14th (local time), Fed Board member Nellie Liang said, "A total of 150bp (1.50% points) of benchmark rate cuts is needed this year to prevent the labor market from weakening."
She noted that recent employment indicators are showing signs of cooling, and said preemptive monetary easing could help mitigate downside risks to the economy. This is seen as a more dovish view than the gradual-cut expectations raised by parts of the market.
Liang’s remarks underscore that differences of opinion exist within the Fed over the future rate path, further heightening market attention on this year’s monetary-policy direction.
