A series of Fed officials support continuing to cut interest rates, exchange rate pressure will cool down by the end of 2024

Recently, a series of Fed officials have expressed their opinions on the policy of cutting the basic interest rate. Speaking about the consensus of officials on lowering the interest rate by another 25 basis points, Ms. Collins, President of the Boston Fed, said that the Fed may need to continue adjusting monetary policy. However, Ms. Collins emphasized that the interest rate cutting plan will not follow a predetermined path but the Fed will rely on economic data.

According to Ms. Collins, the Fed wants to focus more on supporting the labor market than on controlling inflation. This was also mentioned by Fed Chairman Jerome Powell once in his speech in August 2024.

Fed Governor Adriana Kugler said she supports further rate cuts if inflation shows signs of cooling. St. Louis Fed President Alberto Musalem also said that now may be the right time to gradually bring interest rates back to neutral.

In an interview with Yahoo Finance, Chicago Fed President Austan Goolsbee also said that positive September jobs data will change the trend of interest rate cuts in the next 12 to 18 months.

According to newly released US labor market data, there were 254,000 jobs in September, higher than the 150,000 predicted by experts. The unemployment rate also fell from 4.2% to 4.1%.

Many Fed officials agree with the plan to continue cutting interest rates, the USD exchange rate may continue to cool down from now until the end of the year. (Photo TL)

However, Ms. Collins said that if the labor market cools and growth slows, the economy could be negatively impacted again.

Senior Fed officials have predicted that the base interest rate will be cut by another 25 basis points at the upcoming two meetings in November and December. Even New York Fed President John Williams strongly supported a 50 basis point cut at the previous meeting and two rounds of 25 basis points this year.

The fact that Fed officials support continuing to cut interest rates in late 2024 is expected to bring positive signals to the Vietnamese economy.

In the context that the USD exchange rate has increased again in the first week of October to 24,852 VND/USD, this interest rate cut will help reduce the exchange rate pressure on VND from now until the end of the year. From there, the SBV will have more room to continue implementing policies to support growth for the Vietnamese economy.

Source: https://www.congluan.vn/loat-quan-chuc-fed-ung-ho-tiep-tuc-cat-giam-lai-suat-ap-luc-ty-gia-ha-nhet-cuoi-nam-2024-post316157.html