New Fed voting member Paulson: Rate cuts can wait; employment is more worrying than inflation.

Paulson hinted that she agrees with the prevailing view that there is no need to rush into another rate cut. Paulson, who will be a voting member on interest rates this year, supported the Federal Reserve's decision to cut rates in the past three meetings. She stated that she expects inflation to make meaningful progress toward the central bank's 2% target by the end of the year, but she is satisfied with keeping interest rates stable at the Fed's upcoming meeting on January 27-28. She believes interest rates are still high enough, slightly above the neutral level that neither stimulates nor inhibits growth, and stated that maintaining this level is appropriate for now and helps accomplish the task of reducing inflation. At the same time, Paulson indicated that she might favor a moderate rate cut later this year, provided either inflation data confirms her expectations—that price pressures are easing—or evidence emerges that labor market conditions are unexpectedly deteriorating. (Jinshi)