Federal Reserve's Paulson: If inflation cools, the Fed may cut interest rates further.

Philadelphia Federal Reserve President Henry Paulson said the Fed could cut interest rates further if inflation cools, but hinted that any additional rate cuts might not be immediate. In a speech in Philadelphia on Saturday, Paulson expressed cautious optimism that inflationary pressures might ease in the coming months. This is her first time serving as a voting member of the Fed's policy committee. She stated that the current target range of 3.5% to 3.75% is still "slightly tight," meaning that this level is sufficient to curb inflation, which could create conditions for further rate cuts in the future. According to the published transcript of her speech, Paulson said: "If inflation eases and the economy remains on track, a modest adjustment to the federal funds rate later this year may be appropriate." Paulson said that the "signals" regarding the health of the labor market are "mixed," suggesting that the market is under pressure but has not collapsed, and she is waiting for more data to clarify the situation. These remarks suggest that she may want to see more evidence about the economic evolution in the coming months before supporting further policy adjustments. (Jinshi)