Federal Reserve's Paulson: Supports two more rate cuts this year, policy should ignore the short-term impact of tariffs

Anna Paulson, a 2026 FOMC voter and president of the Philadelphia Fed, said she supports two more 25 basis point rate cuts this year, arguing that monetary policy should ignore the impact of tariffs on rising consumer prices. The policymaker noted that the Fed's decision to cut by 25 basis points last month was "reasonable." She believes that with monetary policy remaining moderately restrictive, it is appropriate to proceed with easing in the direction indicated by the Fed's latest Summary of Economic Projections. The median forecast supports two more 25 basis point rate cuts before the end of the year. Fed officials will hold two more meetings in 2025, including one scheduled for October 28-29 in Washington. Paulson's speech marked her first public comments on the economic situation since assuming the Philadelphia Fed presidency in July. She expects the economy to continue expanding at an above-trend pace in the third quarter after exceeding expectations in the second quarter. (Jinshi)